A value added tax, GST (Goods & Services Tax) has replaced all the current forms of indirect taxes being levied in the country. Many people have questions in mind- what is goods and services tax? What is important of GST in India? Irrespective of the size of business GST is now applicable with no excuse, making the process to be the biggest fiscal reform of all times.
With GST implemented, multiple taxations are not there anymore and also a unified tax structure will be followed throughout India. At loanbaba.com, you will get GST explained in complete. Read below to know more.
As the name suggests, GST is applicable to goods and services both. To make centre and state independent fiscally, the nation will now follow a dual system of GST. A four tiered tax structure has been mechanized by the GST council constituting the Union Finance Minister and various Finance Ministers of different states, which consists of four tax slabs for different categories of products and services viz. 5%, 12%, 18% and 28%.
So GST, India basically merges the taxes given above under the same umbrella to make it quite simple and easy.
The taxes under GST will be of three types:
CGST, in which the revenue will be collected by the centre government,
SGST, in which the revenue will be collected by the state government under intra-state sales, and
IGST, in which revenue will be collected by the centre government for inter-state sales
For sale within the state, the revenue will be shared by both centre and state governments under CGST and SGST which have taken the place of VAT, CST, excise duty and service tax.
And, for sale to another state the revenue will belong to centre government only under IGST which have taken place of CST, excise duty and Service tax.
Example: Suppose a dealer sells a television for Rs. 20,000 within the state @12% GST, the tax amount of Rs. 2,400 will be divided by the centre and state government. Whereas, if same television is sold outside the state, the revenue will belong to centre government only under IGST.