Meaning Of GST

Goods and service tax(GST) is an indirect tax levied at prescribed rate on every supply of goods and services except on petroleum and alcohol  for human consumption.Supply of goods means sale of goods and supply of services means rendering of services.It is nation-wide tax seeking to unify several indirect taxes and is based on the principle of 'One nation one tax'.

GST Act was passed in the Parliament on 24th March,2017 and it came into effect from 1st July,2017.

Taxes Merged Into GST are:
Central Level Tax:
Excise Duty 
Service Tax
Central Sales tax

State Level Tax:
Octroi And Entry Tax
Purchase Tax
Entertainment Tax
VAT
Luxury Tax
Taxes On Lottery

GST Rate Structure:
Essential items including food                                            0%
Common Used items                                                           5%
Standard Rate                                                                      12%
Maximum goods and all services standard rate                  18%
Luxury items and tobcco                                                     28%



Chracterstics Of Goods And Services Tax

(i) GST is comphrehensive Indirect Tax:GST is comphrehensive indirecttax which has replaced all indirect taxes levied by Centre And State Governments except custom duty,electricity,taxes on petroleum,taxes on alcohol and taxes levied by local bodies.

(ii) Uniform GST Rates:There are uniform rates of GST across all states and union territories.

(iii) GST Paid is not Cost:GST Paid is not a cost for purchaser but it is an asset because it can be set off against GST calculated.

(iv) GST is value added tax:GST is value added tax because GST paid is set off against GST collected.

Objectives Or Advantages Of GST

(1) Decrease in Cost of Goods:The cost of goods will decrease since tax on tax is eliminated in GST regime .In the pre-GST regime,there were many indirect taxes levied by both centre and state.For example,centre charged excise duty on goods manufactured and states charged VAT on the same goods.This leads to a tax on tax also known as cascading effect of taxes.

(2) Ease Of Doing Business:In a pre-GST period,there were multiple types of indirect taxes such as Excise Duty,Sales Tax,Service Tax etc. and as a result,a business was required to register itself separately under each such Act.

(3) Developing Common National Market:GST is levied at same rate on similar goods and services across all states and union territories.

(4) Reduction in Tax Evasion:GST is administrated through computer system.Electronic return filing and assessment has reduced tax evasion and compilation cost.

Types Of Taxes Under GST

(i) Central GST (CGST)

(ii) State GST (SGST):This tax is levied on intra-state sales, i.e., within the same state.For example,a dealer of rajasthan sells goods to consumer of rajasthan worth rs50,000,Suppose,gst on goods is 12%.This rate will compromise of 6% CGST and 6% SGST.then seller has to collect 12% GST From consumer i.e., 6000 for 50000 from which 3000 will go to central government and 3000 to state government.

(iii) Integrated GST (IGST):It is levied on inter-state sales i.e., sales of goods and services outside the state.It is also levied on import of goods and services in india and export of goods and services from india.
Thanks For Reading!!!
-Sujal Juneja
(Juneja Technology)