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Learn Everything about GST !!

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GST, also known as Goods and Services Tax is an indirect form of tax that is implied on the supply of goods and services in and out of the country. The Act was established in the Parliament on 29th March 2017 and came into force on 1st July 2017. It came into existence just to bring uniformity in the Indian taxation system.


Let's learn all the facts about GST...


What is GST?


We all want answers about the hype behind this huge step of the Indian government on the taxation system, So as per the definitions, GST is an indirect form of tax that was introduced in the Indian taxation system to replace all the other taxes that were present in the Indian taxation system which was service tax, entry tax, luxury tax, etc.


Why is the main reason GST was implemented? Why GST is Important?


There were two issues with this consumption tax: Firstly, the percentage of this tax varied from state to state. Secondly, the tax one paid was levied on the cost of goods or services, after subtracting the cost of previously taxed materials or services. This garnered a lot of confusion and often led to double taxation.


In simple words...


The main reason behind GST to come into existence was to reduce the inconvenience caused due to the multi-stage tax system. 


For Example. Consider that a product or good is being manufactured, at that moment the chain of tax that would be built or proposed would be on Purchase of raw materials, production or manufacture, Warehousing of finished goods, Sale to wholesaler, Sale of the product to the retailer and Sale to the end consumer. Till the time the common people get their hands-on the product, the total cost gets higher than the actual price because of the value addition at a different level. After that, the additional charges are implied if the product would be sold in a different state.


The same level of the tax burden is implied in the service too. for example, previously if we visited any hotel, restaurant, etc apart from the actual bill the value was added due to the service and luxury tax.


This all created a bundle of the complex tax burden on the common people and at the same time also created the chances of corruption. To reduce this GST came in forse. 


List of direct taxes that are no longer applicable because of GST:


- Central Excise Duty


- Duties of Excise


- Additional Duties of Excise


- Additional Duties of Customs


- Special Additional Duty of Customs


- Cess


- State VAT


- Central Sales Tax


- Purchase Tax


- Luxury Tax


- Entertainment Tax


- Entry Tax


- Taxes on advertisements


- Taxes on lotteries, betting, and gambling


What is the GST functioning module?


GST would be implied on three different level-


CGST- Collected by the Central Government on an intra-state sale. it has effectively replaced all the previous Central taxes such as Central Excise Duty, Customs Duty, Service Tax, SAD, CST, etc.


SGST- Collected by the State Government on an intra-state sale. This tax replaces all the previous taxes such as Entry Tax, Value Added Tax, Entertainment Tax, State Sales Tax, cesses, and surcharges.


IGST- Collected by the Central Government for inter-state sale. The Central Government collects IGST and distributes it among states. IGST is levied when goods or services are transferred from one state to another. The tax was implemented so that states would only have to deal with the Union Government rather than dealing with each state.


Changes that GST bought-


  1. GST has removed this cascading effect.
  2. GST has improved the collection of taxes as well as boosted the development of the Indian economy.
  3. GST the indirect tax barriers between states and integrating the country through a uniform tax rate.
  4. Simple tax regime.E-Commerce operators no longer suffer from differential treatment
  5. Increased ease of doing business.


How to Register?


To register yourself under GST, Contact your nearest GST Suvidha centers now. 


What happens when you do not pay GST-


If you do not register and pay your GST you would be liable to a penalty of 10% of your tax amount, subject to a minimum of Rs.10,000 in case you fail to register and pay GST. In case you are found to be deliberately withholding GST payments, then a 100% penalty will be levied on your tax amount.



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