GST (Goods and Service Tax)
- GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and Service Tax Act was passed in Parliament on 29th March 2017.
- The Act came into effect on1st July 2017; Goods & Services Taxing India is a comprehensive, multistage, destination-based tax that is levied on every value addition.
- In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services.
- GST is one indirect tax for the entire country.
- Under the GST regime, the tax will be levied at the final point of sale.
- In the case of intra-state sales, Central GST and State GST will be charged. Inter-state sales will be chargeable to IntegratedGST.
Components of GST
- The component of GST is of 3 types.
- They are CGST, SGST & IGST.
- CGST: Collected by the Central Government on an intra-state sale (Eg: Within state/ union territory)
- SGST: Collected by the State Government on an intra-state sale (Egg: Within state/union territory)
- IGST: Collected by the Central Government for inter-state sale (Eg: Maharashtra to Tamil Nadu)
In most cases, the tax structure under the new regime will be as follows:
| Transaction | New Regime | Old Regime | |
| Sale within the State | CGST + SGST | VAT + Central Excise/Service tax | Revenue will be shared equallybetween the Centre and the State |
| Sale to another State | IGST Central Sales Tax | + Excise/Service Tax | There will only be one type of tax (central) in case of Inter-state sales. The Centre will then share the IGST revenue based on the destination of goods |