Goods and Services Tax
Goods and Services Tax (GST)
Goods and Services Tax is a type of Indirect tax used on the supply of goods and services in India.It has replaced many Indirect taxes that previously existed in India. Goods and services tax is also called GST in short form. The Goods and services tax (GST) was passed on 29th march 2017 in the Parliament but the act came into effect from 1 July 2017 through the implementation of 101st Amendment of the constitution of India by the Indian government. Goods and services tax is a comprehensive, multi-stage and destination based indirect tax.
Goods and services tax (GST) is one Indirect tax for the entire nation. The rates, rules and regulations of GST are governed by the GST council which consists of the finance ministers of the central government and all state government.
Types of Goods and Services Tax (GST)
There are four types of GST:-
- Integrated Goods and Services Tax (IGST)
- State Goods and Services Tax (SGST)
- Central Goods and Services Tax (CGST)
- Union Territory Good and Services Tax (UTGST)
Major Services and Service tax included under the GST
All the major services and service tax has been included under the Goods and Services Tax are:-
On the state level:-
- State excise duty
- Service tax
- Additional excise duty
- Countervailing duty
- Special additional custom duties
At the Central level:-
- Sales tax
- Purchase tax
- Entertainment tax
- Central sales tax
- Octroi and entry tax
- Luxury tax
- Taxes on lottery gambling and betting
Advantages of Goods and Services Tax (GST)
There are many advantages of Goods and services tax. Some of the Advantages of are given below:-
- Simplified online process for GST
- Lower cost of Compliance
- Removal of the cascading effect of tax (tax on tax effect)
- Regulation of unorganized sector
- Improves efficiency in logistics
- Composition Scheme for Small businesses
- Allows a higher number for registration
- Defined treatment for e-commerce
Good and Services Tax Rates
GST (Goods and services tax) rates on some common items are given below:-
Semi-polished and Cut stones are included under this tax slab.
Household necessities like edible oil, sugar, spices, tea and coffee are included. Coal, Indian Sweets and Drugs that saves life are also covered under this GST slab.
This includes Computers and Processed food
Toothpaste, Soaps and Hair oil capital goods and industrial intermediaries are covered in this slab.
Luxury items such as small cars , consumer durables like Air Conditioner and Refrigerators, Premium cars , Cigarettes and aerated drinks , High-end motorcycles are included here.