One Nation, One Tax

The taxation system is divided into two categories: direct and indirect taxation. Direct taxation is paid directly to the government by individuals, whereas indirect taxation is when a seller acts as an agent for the government to collect taxes from consumers. Before the first, India’s indirect taxation included the following categories of taxes. Customs Duty, Central Excise, Service Tax, and Central Sales Tax were all included in the Central Levy. VAT, Entry Tax, and Ancillary Taxes were all included in the State levy.

The GST Act’s stated goal was to achieve national tax consistency and eliminate the cascading impact of VAT and tax multiplicity, but does the classification of CGST, SGST, and IGST achieve this goal?

GST is a single tax that applies to the supply of goods and services from the manufacturer to the end user. GST is basically a tax on value addition at each level since credits for input taxes paid at each stage will be available in the subsequent stage of value addition. GST would ensure that indirect tax rates and structures are consistent across the country, enhancing corporate certainty and efficiency. There would be minimal tax cascading if there was a system of seamless tax credits across the value chain and across state borders. The inclusion of key Central and State taxes in GST, as well as the complete and thorough set-off of input goods and services and the phase-out of the Central Sales Tax (CST), will lower the cost of locally manufactured goods and services. This will improve Indian exports by increasing the competitiveness of Indian goods and services in the worldwide market. The overall tax burden on most goods will be reduced as a result of efficiency gains and leakage prevention, which will benefit consumers.

During Atal Bihari Vajpayee’s presidential term in 2000, he originally proposed the concept of “One Nation, One Tax.” The idea’s ratio decidendi was to overhaul the country’s taxation structure, after which the government organised a GST committee to write laws related to GST. The GST legislation were revised several times, and after failed attempts in 2011, 2013, and 2015, it was finally ratified by parliament in 2016 as part of the Indian Constitution’s historic 101st amendment. GST stands for Goods and Services Tax, and it went into effect on July 1, 2017. The GST’s taxing structure centred on establishing a consistent taxation system across the country to replace tariff and non-tariff obstacles in the economy. The GST slab is divided into four taxes brackets: 5%, 12%, 18%, and 28 percent. 2 One of the most sacred purposes of the Indian government was to create consistency in the country’s economic realm, which would stimulate socioeconomic and infrastructure development.

GST Is Divided into Three Types-


  • The Central Goods and Service Tax (CGST) is part of the “one nation, one tax” concept. It is imposed by the federal government and was established under the 101st Amendment.
  • The State Goods and Service Tax (SGST) is a component of the “one nation, one tax” that is imposed by the state government.
  • The Integrated Goods and Service Tax (IGST) is part of the 101st Amendment’s “one nation, one tax” concept. When there is interstate trade and commerce between the states, the IGST is imposed by the federal government.

According to the National Council of Applied Economic Research, the Indian economy would grow at a rate of 0.9 percent to 1.7 percent this year (NCAER).

According to Morgan Stanley analysts, the overall impact of GST is projected to improve growth due to better resource allocation, improved domestic production efficiency, and increased exports.

Investments in the Indian economy would appear to become more appealing as growth improves, with GDP growth expected to increase by at least 0.5 percent following the implementation of GST.

With the proper implementation of GST, not only the consumer but even the seller and producer receive benefits. It should also be taken into account how one tax for the entire nation will help ease out the entire process and make it so much easier for the economy to grow immensely. It is a slow process, and we have seen a gradual increase in the process, and if we follow the guidelines laid down in the taxation bills judiciously, the day isn’t far that we will be at a recognisable spot amongst the world economic power houses.

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