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What Is The GST (Goods And Services Tax)?
by Ananya Nair Accounting and Legal ServicesGST stand for Goods and Services Tax is an indirect federal sales tax paid on the purchase of particular products and services.
Types of GST
The biggest feature of GST is that the rate of
this tax on any goods or services is the same across the country. That is, the
customer or consumer from any part of the country has to pay the same tax on
that goods or services. There are four types of GST
- CGST (Central Goods and Service Tax): Central Goods and Services Tax is applicable on intrastate (within state) supply of goods and services. The central government levies tax on it. The CGST Act governs this type of GST. Here the revenue generated from CGST is collected along with SGST and is divided between the central and state government.
- SGST (State Goods and Service Tax): State Goods and Services Tax is one of the types of GST which is implemented by the government of a particular state. The state government levies taxes on goods and services within the state (intrastate, for example Mysore), and the state government is the sole beneficiary of the revenue collected.
- IGST is Integrated Goods and Services Tax: Applicable transactions between two different states or a state and a Union Territory, i.e., interstate
- UTGST/UGST: Union Territory Goods and Services Tax is a type of GST levied on goods and services in Union Territories. It is similar to SGST but applicable only to Union Territories.
GST enforces standard tax rules in all states, covering a wide range of businesses. Taxes are distributed between the central and state governments in this case, according to a predetermined and pre-approved formula. Also since there are no additional state taxes, it is very easy to sell services and goods alike across the country.
Generally, the person effecting taxable supplies is liable to pay taxes. However, Import of service will be taxable in the hands of the recipient i.e., importer.
GST has replaced around 17 indirect taxes levied by the state and central governments. However, due to each state's different set of tax rules, there was a lack of uniformity in the tax system. As a result, internal trade and commerce were endangered, and tax evasion was a concern. With the implementation of GST, all these problems have been solved.Sponsor Ads
About Ananya Nair 
Accounting and Legal Services
25 connections, 0 recommendations, 109 honor points.Joined APSense since, June 5th, 2018, From New Delhi, India.
Created on Dec 14th 2021 06:55. Viewed 270 times.
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