The tax is charged on the final price, is paid by the consumers, and remitted by the government. It is referred to as a single tax taxed across the nation. The GST is not levied on where the goods and services are manufactured it is levied in the state where they are consumed. The business players add GST to their product or service and the buyer pays a sales price inclusive of GST. It is even referred to as Value added tax in some countries. It is collected by the seller and passed on to the Government.
What is GST and its Benefits?
GST is a Goods and service tax, an indirect tax law applicable across India. It came to effect on July 01, 2017, in India. Every service or product attracts a different rate for taxation purposes under GST likewise luxury or sin goods are taxed at higher rates while necessity times are charged lower or nil slab rates. It is a value-added tax levied on most goods and services that are sold for the purpose of domestic consumption. It is a type of multi-stage tax system that is comprehensive in nature and levied on the sale of goods and services.
Let’s take an example of a manufacturer who produces a basket the value of it increases when the wood pieces are assembled in a single unit. The manufacturer then passes/sells it to a warehousing team to label it and pack it. After this, the warehousing team packs it and sells it to the retailer. The retailers invest in the marketing of its product, thus increasing their value. So in this example, there is a value addition taking place at each stage before the final product reaches its end-user.
Most countries globally have got a unified GST system which means applying a single tax rate throughout the country. All central taxes like sales tax, service tax are merged with the state-level taxes like entry tax, entertainment tax. So collection happens as one single tax. India adopted a dual GST structure in the year 2017 as one of the biggest reforms to eliminate tax on tax or double taxation which has got a cascading effect from manufacturing level to consumption level. It is to curb inflation as the prices of the product won’t go up by this taxation effect in long run.
Eligibility Criteria of GST For Business
The below-mentioned entities and individuals are eligible for Goods And Services Tax:
1. E-commerce giants
2. Individuals who supply through e-commerce platforms
3. Individuals who pay taxes via the reverse charge system
4. Input service distributors and suppliers’ agents
5. Non-Indian residents who pay taxes in India
6. Businesses with annual revenues exceeding the threshold limit
7. Individuals who registered prior to the implementation of the GST law
In India, most people don’t know how to register for GST or what are the steps involved in the GST registration process. Daily filing act as their helping hand as we offer consultancy as well as carry out registration process on behalf of companies and business owners.
Types of GST:
It is also the one who can levy GST
1. CGST: Central Goods and service tax is levied by the Centre.
2. SGST/UTGST: It is state or union territory goods and service tax levied by the state or union territory respectively.
3. IGST: Integrated goods and service tax. It is levied for interstate supply for goods
The following are a few of the indirect taxes that were before GST:
1. Duties of excise
2. Central excise duty
4. Entertainment tax
5. Purchase tax
6. Luxury Tax
7. Tax on an advertisement
8. Tax on Luxury
9. Central sales tax
10. State Vat
11. Additional Duties of Excise
You might also like to read: “The top 10 consumer court cases of India“
Benefits of GST
The Goods and Services Tax represents a significant shift in India’s taxation landscape. Previously, different taxes were paid to the state and the central government individually. GSTIN, on the other hand, combined all taxes into one, making it a practical example of ‘One Nation, One Tax.’ The following are some of the advantages that GST provided:
1. No multiple taxations.
2. Unification of all indirect taxes, such as excise duty and sales tax.
3. A clear distinction between taxes on luxuries and essentials.
4. Implementation of a simplified approach for filing income tax returns and taxes, such as through the official GST web portal.
5. Growing the real estate and small business sectors (MSME sector).
6. It is easier to transport commodities because no separate taxation is necessary.
7. Taxes are controlled by both the state and federal governments.
8. Taxation procedure and methodology transparency.
Benefits of GST for the Central and State Government
1.It is relatively easier to implement and administer GST
2. An improved version in compliance and revenue collections
3. Clear and Better revenue effectiveness
Do you know “The Top 10 Consumer Court Cases?”
GST Consumer Benefits
1. Payment of single, clear, and transparent taxes
2. Reduction of the burden of heavy taxation on taxpayers
While switching to an absolutely new and exclusive tax regime system is the biggest reform and its success would ease the woes of stakeholders.