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Everything you should know about GST
by Jayden Smith BloggerGST or Goods and Services Tax came into effect on July 1, 2017, after long debate and several postponements. It is a tax on goods and services which will be levied on all kinds of products and services apart from petrol, diesel, and alcohol. It has replaced several indirect taxes in India, which included Central Excise Duty, VAT, Service Tax, CST or Central Sales Tax, Octroi, Entry Tax, Countervailing Duty, as well as various surcharges and cess. GST registration in Delhi allows quick compliance.
As the main benefit of this process, it will bring efficiency in tax collection as it enables to collect more taxes at less expense.
What are the essential features of GST?
- It is a tax on the value addition that is happening at every stage.
- At every stage of manufacturing and distribution, it provides an input tax credit
- The tax burden can be successfully transferred by input tax to the end customer
- With very few exceptions all sectors are subject to GST
- There is seamless credit across all states as well as the entire supply chain.
Types of GST
GST has been divided into several components – Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST) and Inter-State GST or IGST.
The Central Government has consolidated all the taxes into one tax under the name of CGST. These include Service Tax, Excise Duty, Additional Customs Duty, and Additional Special Excise Duty
The SGST has subsumed into itself all state-based taxes such as VAT, Entertainment Tax, Octroi. Each purchase and sale will have two incidences of GST one from central and the other from the state as per GST registration in Delhi.
In case goods are produced in one state but consumed in another, IGST will be applicable. There is a notion that since GST is charged in the state where the sale happens and not manufacture the latter will lose out. For example, cars are produced in Tamil Nadu and Gujarat but sold (and therefore taxed) in West Bengal, Orissa, and Bihar. To overcome this problem, the Central Government has decided to compensate manufacturing states for 4 years until a clear pattern of tax flow emerges.
What are the advantages of GST?
- A single tax is easy to implement than a dozen different ones.
- The GST has several slabs – 5%, 12%, 18% and 28%. Price of most goods has reduced under GST rates. In the past 20 months, huge rationalization has been brought as goods have been shifted from one tax bracket to another. 99% of goods are now in 12% or 18% bracket.
- If rules and regulations are simple and happen through a single window such as GST registration in Delhi, there tends to be greater acceptance. That is why GST collection has been at a record level in the year 2018-19.
- Better compliance has led to more transparency with people tending to bring their business transactions out in the open and conducting them in a legally free and fair manner.
India has been one of the last nations to adopt GST, and it has been a long overdue measure for the world’s seventh largest economy.
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About Jayden Smith 
Blogger
14 connections, 1 recommendations, 49 honor points.Joined APSense since, April 26th, 2016, From Delhi, India.
Created on Apr 1st 2019 01:34. Viewed 297 times.
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