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.

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. Wikipedia described the launch 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 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 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.

As India is a Federal Republic, both Central and State governments have the authority to collect taxes. The main objective of incorporating the GST is to eliminate tax on tax i.e. double taxation which cascades from the manufacturing level to the consumption level. Different Centre and State Taxes are subsumed under the GST. Consequently, the GST consists of three components in it. It consists of  Central GST (CGST), State GST (SGST) and Integrated GST (IGST). The GST have wide range of benefits for the consumers, Business entities and for both central and state governments. The Central government taxes subsumed under GST includes Central Excise Duty, various additional Duties of Excise, different additional Duties of Customs (commonly known as CVD), Service Tax, Central Surcharges and Cesses so far as they relate to supply of goods and services. Similarly, the state government taxes subsumed under GST includes State VAT, Central Sales Tax, Luxury Tax, Entry Tax (all forms), Entertainment and Amusement Tax (except when levied by the local bodies), Taxes on advertisements, Purchase Tax, Taxes on lotteries, betting and gambling, State Surcharges and Cesses so far as they relate to supply of goods and services.

 


 
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