What is Goods and Service Tax(GST)
"GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.
Why GST?
"The main objective of incorporating the GST was to eliminate tax on tax, or double taxation, which cascades from the manufacturing level to the consumption level. It has also reduced the burden of compliance for the tax payers and eased tax administration of the government. "
Advantages of GST.
1. Uniform procedures for registration, filing of returns, payment of taxes, and tax refunds.
2. Elimination of cascading of taxes thanks to the seamless flow of tax credit from the supplier or manufacturer to the retailer or user. (Repeated)
3. Small scale suppliers can make the most of the composition scheme to make their goods less expensive.
4. Higher efficiency with regards to the neutralisation of taxes so that exports are globally competitive."
What are the components of GST?
CGST: Taxes collected by the Central Government on an intra-state sales i.e. within a particular state (Eg: transaction happening within Delhi).
SGST: Collected by the State Government on an intra-state sales i.e. within a state (Eg: transaction happening within Delhi).
IGST: Collected by the Central Government for inter-state sale i.e. in between 2 states (Eg: Delhi to Tamil Nadu).