Historical Evolution Of SGST

Full Text Link

Khushii Chauhan, Manav Rachna University

Khushii Chauhan, Manav Rachna University

Introduction

The introduction of the Goods and Services Tax (GST) in India marked a significant milestone in the nation’s fiscal history, transforming the indirect taxation landscape by subsuming various central and state taxes into a single, unified system. A crucial component of this system is the State Goods and Services Tax (SGST), which empowers state governments to levy taxes on intra-state supplies of goods and services. Understanding the evolution of SGST provides insight into India’s journey towards a more streamlined and efficient taxation framework.

Pre-GST Era: The Need for Tax Reform

Before the implementation of GST, India’s indirect tax structure was a complex amalgamation of numerous central and state taxes, including Central Excise Duty, Service Tax, State VAT, and others. This multiplicity led to issues such as tax cascading, where taxes were levied on top of taxes, resulting in increased costs for consumers and businesses alike. Recognising the need for reform, the Government of India initiated discussions on tax restructuring in the late 1990s.

Formation of the GST Concept

In 1999, the Government established a committee headed by Asim Dasgupta, the Finance Minister of West Bengal, to design a GST model suitable for India. The committee’s mandate was to create a system that would harmonise the complex tax structure and promote economic integration across states. This initiative laid the foundation for what would eventually become the GST system, including SGST.

Development and Challenges

The journey towards GST faced numerous challenges, including political disagreements, concerns over revenue loss for states, and technical hurdles in implementing a nationwide tax system. The initial target for GST implementation was set for 2010, but it was postponed multiple times due to these challenges. It wasn’t until 2017 that significant progress was made.

HISTORICAL EVOLUTION OF SGST.pdf

Download PDF • 139KB