Goods and Service Tax
Goods and Services Tax is a form of indirect taxation in India which allows merging of existing taxes into single system of taxation. Introduction of GST is a very significant step in the world of indirect taxes in India. By merging large number of taxes into a single tax would mitigate cascading taxation in a major way. With GST, it is anticipated that the tax base will be comprehensive, as all goods and services will be taxable with minimum exemptions. GST will have an impact on almost all the aspects of the business operations in the country.
SALIENT FEATURES OF GST
- GST is defined as any tax on supply of goods and services other than on alcohol for human consumption.
- GST is applicable on supply of goods or services against the present concept of tax on manufacturing of goods or on sale of goods.
- GST will be dual with the centre and states simultaneously levying it on a common base.
- An integrated GST is levied on inter-state supply of goods or services, that is, IGST.
- Import of goods or services will be treated as inter-State supplies and is subject to IGST in addition to the applicable customs duties.
When introduced in Rajya Sabha, GST bill was in a big controversy. Being avoided by the opposition party, the bill took a very long time to get passed. But, finally is has been passed.
SCENARIO BEFORE GST
We had Value Added Tax (VAT) system before this GST bill was passed both at central and state levels. But the central tax extends the tax only against central excise duties.
Likewise, state tax cover only sales. Sellers can claim credit only on VAT paid on previous purchase.
Once GST came into effect all centre and state level taxes are combined within an integrated tax with two components- central GST and state GST.
CENTRAL TAXES THAT GST WILL REPLACE ARE:
- CENTRAL EXCISE DUTY
- DUTIES OF EXCISE
- SERVICE TAX
- SPECIAL ADDITIONAL DUTIES OF CUSTOM
- ADDITIONAL DUTIES OF EXCISE
- CESSESS AND SURCHARGES
STATE TAXES THAT GST WILL REPLACE ARE:
- STATE VAT
- CENTRAL STATE TAX
- PURCHASE TAX
- LUXURY TAX
- ENTRY TAX
- ENTERTAINMENT TAX
- TAXES ON ADVERTISEMENTS
GST COUNCIL
GST council consist of union finance minister, MoS incharge of revenue, Minister incharge of finance and taxation, or any other minister nominated by each state.
Some of the related articles:
- Goods and Service Tax
- GST REGISTRATION
- ONLINE REGISTRATION FOR GST
- Compliance under GST Regime – Returns & ITC Matching
Author: This blog is written by Ms. Ayushi Mishra, a passionate blogger & intern at Aapka Consultant.
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