GST(goods and service tax)
Before GST, there is an indirect tax method of government, in which different types of taxes were imposed by the government and it has cascading effect on the price of product. GST by its term is Goods and services tax. Is it an indirect tax which replaced many indirect taxes? It is started its expedition in 2000 where a committee was setup to draft a law. After seventeen long years it take to evolve a law. GST bill passed in Lok Sabha and Rajya Sabha in 2017 and from 1st of July 2017, It’s Law came into the system. There are only three taxes applicable under this system: SGST, CGST and IGST and overall it is technologically driven Law and process are done online and this helps to accelerate the process.
Goods and Services Tax (GST) refers to indirect taxation. This tax is enforced in India. This tax is levied from the point of view of consumption. This is different from previous sources for collections as in previous taxes. In addition, this tax applies to the production process. Refunds are available to all parties at different stages of production. In addition, GST includes almost all indirect taxes.
Goods and Services Tax (GST) is a single tax system. This tax is levied jointly by the Center and the State. In addition, the imposition is subject to the recommendation of the Federal Council.
In GST, goods and services are divided into five different tax slabs. This is for tax purpose. After all, the tax slabs – 0%, 5%, 12%, 18% and 28%. In addition, petroleum products, alcoholic beverages and electricity are not subject to GST. Rough precious and semi-precious stones have a special rate of 0.25%. Gold also has a special rate of 3%.
It, levied a lot of taxes and fees. These include central excise, service tax and additional customs duty. In addition, state-level VAT, surcharge and octroi are also subject to GST. The GST rule removed the levy. In addition, these levies apply to interstate shipments of goods. In particular, It is applicable on all transactions. These transactions are sale, purchase, transfer, lease and import.
Advantages of GST
First, the cascading tax effect refers to the tax on the tax. Most importantly, it eliminates the broader effects of the GST tax. This is due to the widespread indirect tax . It certainly brings all indirect taxes under one umbrella.
Another important benefit of GST is the increase in admission for registration. Earlier, VAT was applied when the turnover crossed Rs 5 lakh. The application of this VAT is in business. Also, there is no service tax when the turnover is less than Rs 10 lakh. In contrast, the limit under GST is Rs 20 lakh. Therefore, this means a reduction for most small traders and service companies.
Small businesses will definitely benefit immensely under GST. Apart from this, these small businesses have a turnover of Rs 20 to 75 lakh. The advantage of these small businesses is due to the composition scheme. Taxes for small businesses under the It is likely to be reduced. They can do this using composition schemes.
The entire process is available online. Most importantly, it is a simple and straightforward online process. Therefore, it can be really beneficial for start-up businesses. They do not have to struggle to obtain various registrations.
Finally, it is a revolutionary tax system for India. Most importantly, many experts consider it one of the biggest tax reforms. GST will definitely benefit the entire population of India.
SEO- Madhuri Chauhan