Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services across India. It was implemented in 2017 to simplify the taxation system by replacing multiple taxes like VAT, Excise Duty etc with one unified tax- GST.
Under this new regime, both Central and State governments levy GST on all transactions involving goods or services within their respective jurisdictions. The revenue generated from it then divided between Centre and States based upon predetermined ratios – notably CGST(central), SGST(state)– as defined by 14th Finance Commission report.
Centre-State Relations:
The GST implementation has strengthened Centre-State relations in many ways. For instance, earlier under old Indirect Taxation System- state government had full control over collection of sales tax(VAT); whereas now through GST they share authority over same along with Union Government itself thereby ensuring transparency & accountability throughout process involved while keeping check regional imbalances that could arise due uneven distribution wealth among different states.
Moreover, since all businesses have to register themselves under GST; this provides an opportunity for better coordination between various departments at centre/state levels leading towards more efficient governance overall without any ambiguity around who’s responsible what areas/issues arising during implementation phase
Impact On Domestic Manufacturing Industry:
Another significant impact brought about by GST relates towards domestic manufacturing industry whose growth been hampered previously due cascading effect older taxation regimes – Now with input credit mechanism available manufacturers can claim back taxes paid earlier thus reducing burden cost incurred production activities making them competitive globally relatively speaking against other countries where similar provisions not existent yet.
In conclusion we can say that Goods And Services Tax(GST) has played crucial role strengthening federal structure Indian polity besides promoting ease doing business countrywide alongside providing impetus growth economy large scale too.. With continuous efforts being made improve existing framework further enhance its functioning so as ensure welfare citizens always kept forefront decision-making processes involved!
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