Goods & Services Tax
GST – All That You Want To Know
GST will make India – “One Nation, One Tax, One Market
GST has come into reality by passing of the Constitution (122nd Amendment) (GST) Bill 2014.
Taxes under GST
There will be 3 kind of taxes under GST
- SGST – State Goods and Service Tax – Tax on intra (within) state sales
- CGST – Central Goods and Service Tax – Tax on intra (within) state sales
- IGST – Integrated Goods and Service Tax – Tax on interstate (central) sales
In all there will be one CGST law, one IGST law & 31 SGST laws
- CGST – By Central Board of Excise & Custom (Excise and Service Tax Department)
- IGST – By Central Board of Excise & Custom (Excise and Service Tax Department)
- SGST – State Govt. VAT Department
Tax Sub-Summing Under GST
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The State Government will not be able to impose any taxes, e.g. fat tax by Kerala Government.
Need of GST
- To avoid multiplicity of taxes, e.g. VAT, CST, excise, service tax, etc.
- To avoid cascading effect of tax, e.g. sales tax is charged on excise.
- To avoid double taxation, e.g. VAT & service tax both are charged on restaurant, work contract, Software, etc.
What next – After passing of GST bill by Central Government, 15 State Government have to ratify same – already ratified by 9 States which includes Assam, Bihar, Jharkhand, Chhattisgarh, Gujarat, Himachal Pradesh, Delhi, Madhya Pradesh, Nagaland.
GST will work like VAT and input benefit on purchase will be allowed on intra state and inter-state purchases. The method of input benefit to be allowed is as under
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After ratification of GST by the States, President will constitute GST Council and the Council will decide the final rate of Tax.The base for a successful GST is Robust/ Real-time IT Network. The same is under development by a very reputed IT company and the same will be called GSTN.
Watch Out For Volume 2 in the Next Blog
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