GST (India)

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Basic concepts of GST

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GST Goods and Services Tax (India) :

GST Goods and Services Tax (India) “GST is a tax on  goods and services with value addition at each stage having  comprehensive and continuous chain of set of benefits from the  producer’s / service provider’s point up to the retailers level where  only the final consumer should bear the tax .”

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GST is a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India to replace taxes levied by the   central  and  state  governments . It was introduced as  The Constitution (One Hundred and First Amendment) Act 2016 , following the passage of Constitution 101st Amendment Bill . The GST is governed by GST Council and its Chairman is  Union Finance Minister of India

The following taxes will be bound together by the GST::

The following taxes will be bound together by the GST: Central Excise Duty Service Tax Countervailing Duty Special Countervailing Duty Value Added Tax (VAT) Central Sales Tax (CST) Octroi Entertainment Tax Entry Tax Purchase Tax Luxury Tax Advertisement taxes Taxes on lotteries

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It is levied on all transactions such as sale, transfer, barter, lease, or import of goods and/or services . India will adopt a dual GST model, meaning that taxation is administered by both the Union and State Governments. Transactions made within a single state will be levied with Central GST ( CGST ) by the Central Government and State GST (SGST) by the government of that state. For inter-state transactions and imported goods or services, an Integrated GST (IGST) is levied by the Central Government. It is a consumption based tax, therefore, taxes are paid to the state which the goods or services are consumed not the state in which they were produced.

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There are five tax rates in GST: 0% - 50% of price basket including food grains 5% - Mass consumption items like spices,oils etc., 3. 12% - Processed foods etc., 4. 18% - Soap oils, Tooth pastes,Smartphones etc. 5. a) 28% - White goods and cars etc. b) 28% plus cess - Luxury cars, Masala , Alcohol etc.

Key Features of GST: :

Key Features of GST: Dual Goods and Service Tax Inter-State Transactions and the IGST Mechanism Destination-Based Consumption Tax Computation of GST on the basis of invoice credit method Easy Maintenance of Records Increase in GDP More Competitive Product Reduction in Tax Evasion   Cascading Effect reduction

Objectives of GST: :

Objectives of GST: One Country – One Tax Consumption based tax instead of Manufacturing Uniform  GST Registration ,  payment  and  Input tax Credit To eliminate the cascading effect of Indirect taxes on single transaction Subsume all indirect taxes at Centre and State Level under Reduce tax evasion and corruption Increase productivity Increase Tax to GDP Ratio and revenue surplus Increase Compliance Reducing economic distortions

Regulatory Framework of GST: :

Regulatory Framework of GST: A new set up by Government of India named as ‘GST Council’. GST Council constituted w.e.f . 12.09.2016 The  GST Council  consists of (a) the Union Finance Minister (as Chairman), (b) the Union Minister of State in charge of Revenue or Finance, and (c) the Minister in charge of Finance or Taxation or any other Minister, nominated by each state government.

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