All GST Related Information In One Place

What Is GST

What is GST?

Goods and Services Tax (GST) is one of the biggest indirect tax reform of India. GST can be considered as an indirect tax for the whole nation, which will make India one unified common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.

France was the first country to implement the GST in 1954, and since then an estimated 160 countries have adopted this tax system in some form or another. The tax came into effect from July 1, 2017 through the implementation of One Hundred and First Amendment of the Constitution of India by the Narendra Modi government. The Goods and Services Tax was launched at midnight on 1 July 2017 by the former President of India, Pranab Mukherjee, and the Prime Minister of India Narendra Modi. In Wikipedia, the launch was described as a historic midnight (30 June – 1 July) session of both the houses of parliament convened at the Central Hall of the Parliament. The tax replaced existing multiple cascading taxes levied by the central and state governments. The tax rates, rules and regulations are governed by the Goods and Services Tax Council which comprises finance ministers of centre and all the states. GST simplified a slew of indirect taxes with a unified tax and is therefore expected to dramatically reshape the countrys 2 trillion dollar economy.

In a Federal Republic like India, both Central and State governments have the authority to collect taxes. The goods and services tax (GST) is an indirect federal sales tax that is applied to the cost of certain goods and services. India adopted a dual GST model, meaning that taxation is administered by both the Union and State Governments. Transactions made within a single state are levied with Central GST (CGST) by the Central Government and State GST (SGST) by the State governments. For inter-state transactions and imported goods or services, an Integrated GST (IGST) is levied by the Central Government. Therefore, the GST consists of  Central GST (CGST), State GST (SGST) and Integrated GST (IGST). The GST assures plenty of benefits for different categories of the society, i.e., the consumers, Business entities and for both central and state governments.


 
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