What is GST in India?

 

GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.

In other words,Goods and Service Tax (GST) is levied on the supply of goods and services. Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. GST is a single domestic indirect tax law for the entire country.

GST is considered to be the biggest tax reform in India since independence. It will help realize the goal of “One Nation-One Tax-One Market.” GST is expected to benefit all the stakeholders – industry, government and consumer. Experts believe that GST will lower the cost of goods and services, boost to the economy and make Indian products and services globally competitive, and even boost initiatives like ‘Make in India’.

 

According to Ministry of Finance, “GST will make India a common market with common tax rates and procedures and remove economic barriers.” GST is expected to improve ease of doing business in India.

The Central government passed four sets of GST Acts in the Budget session this year. These were Central GST Act, 2017; Integrated GST Act, 2017; Union Territory GST Act, 2017 and GST (Compensation to States) Act, 2017. The GST Council decided the Threshold limit and rate slabs for the Goods and Services to be taxed under the GST regime.

Here are some details of the decisions taken by GST Council: The threshold limit for exemption from levy of GST is Rs 20 lakh for the States except for the Special Category, where it is Rs 10 Lakh. The Council has adopted a four slab tax rate structure of 5%, 12%, 18% and 28% for GST. A separate cess would be levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the GST rate of 28% for payment of compensation to the states.

GST Rules: All GST-related rules can be read on this like: https://www.cbic.gov.in/htdocs-cbec/gst/index-english

The GST needs to filed via a common portal to be run by GSTN, promoted by the central and state governments. The link for GST Act 2017 https://www.gst.gov.in/