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What is Goods and Services Tax

Goods and Services Tax

About Goods and Services Tax

What is Goods and Services Tax

The Goods and Services Tax (GST) is a uniform indirect tax levied on goods and services across the country. GST, as an umbrella tax, replaced central taxes like central excise, service tax, additional duties of excise & customs, special additional duty of customs, besides cesses and surcharges, on supply of goods and services.
 
Central GST and State GST
 
CGST is levied on intrastate supplies by the central government and SGST is levied on intrastate supplies by respective state governments. 
 
Integrated GST
 
IGST is levied on interstate supplies by the Centre (equal to CGST + SGST combined on supplies made within the state).
 
Any supply of goods or services or both on interstate basis typically attracts IGST on the consideration thereof.
 
Key features of GST
 
* GST envisages all transactions and processes to be done only through the electronic mode, to achieve a non-intrusive administration. This minimises the taxpayer's physical interaction with tax officials.
 
* GST provides for the facility of auto-populated monthly returns and annual return.
 
* It also facilitates taxpayers by prescribing grant of refund within 60 days, and provisional release of 90 per cent refund to exporters within 7 days.
 
* Further facilitation measures include interest payment if refund is not sanctioned in time, and refund to be directly credited to bank accounts.
 
* Comprehensive transitional provisions for ensuring smooth transition of existing taxpayers to GST regime, credit for available stocks, etc.
 
* Other provisions include system of GST compliance rating, etc.
 
* Anti-profiteering provisions for protection of consumer rights: Any benefit by way of reduction in rate of tax or increase in input tax credit arising due to introduction of GST are passed on to customers (through reduction in sale price) by way of commensurate reduction in prices. 
 
* Under the GST regime, exports are zero-rated in entirety, unlike the earlier system where refund of some of the taxes did not take place due to fragmented nature of indirect taxes between the Centre and states.
 
* GST is largely technology-driven and reduces the human interface to a great extent
 
* GST is believed to have improved ease of doing business in India.
 

Latest Updates on Goods and Services Tax

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