GST means Goods and Services Tax.
Let us see why it is so important for India.Tax Saving SIP and also GST will bring uniform taxation through India to all forms of production and services of a product.
The most important point of the GST is that it will tax Economic activity at every stage of production at the same rate.Now first of all, the GST is also a Value Added Tax that means producers at any stage of economic activity have to only give tax on the value added to the product, not on the final output.
It's not tax on taxes.Now to show how much value he has added to the product for taxation he has to show the invoice for the purchase of raw material or product from the previous stage.
If he is not able to show the Invoice he will have to pay the tax on complete output.So by generation of Invoice tax evasion will be checked completely and the government will get complete and proper share of the tax imposed.Also the present scenario where middlemen take away the major factor of tax by helping businesses or manufacturers in tax evasion will stop.
That means it will not follow the prior tax regime of taxing a product/commodity/services on the final cost at every stage.What GST will do is it will tax the product/commodity/services on the value addition at each step.