GST stands for “Goods and Service Tax” levied by Central and State governments on goods and services which come into action from July 1, 2017. The government aims to proposed GST replacing all other indirect taxes.The implementation of GST bill will build a common tax market in India. This bill is a game changer for 1.3 billion consumers in India and most important improvement in the Indirect taxation system.
Features of Goods and Service Tax
- Biggest tax improvement in India
- Harmonized tax structure
- Dual tax structure
- Levied on both goods and services
Dual Tax Structure
CGST will Subsume
- Central excise duty
- Additional excise duties
- Excise duty levied under the medicinal and toiletries preparation act
- Service tax
- Additional customs duty, commonly known as countervailing duty (CVD)
- Special additional duty of customs
- Surcharges and cess
SGST will Subsume
- VAT / Sales Tax
- Entertainment tax (unless levied by local bodies)
- Luxury tax
- Taxes on lottery, betting, and gambling
- State Cess and surcharges related to the supply of goods and services
- Entry tax not in lieu of octroi
IGST
The Centre will also levy and collect IGST on all inter-state supply of goods and services.
Benefits of GST
- Easy processes
- Detract Tax burden
- Common Market
- Integrated approach
- Easy compliance
- Efficient tax structure
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