Goods & Service Tax is an indirect tax imposed on the supply of goods and services. It is a multi-stage, destination-oriented tax imposed on every value addition, which managed to replace multiple indirect taxes, including VAT, excise duty, service taxes, etc.
Types of GST
- The State Goods and Services Tax (SGST)
SGST is defined as one of the two taxes imposed on transactions of goods and services of every state. Levied by State Government of every state, SGST replaces every kind of existing state tax that include Sales Tax, Entertainment Tax, VAT, Entry Tax, etc.
- The Central Goods and Services Tax (CGST)
CGST is referred as the Central Tax levied on transactions of goods and services which take place within a state. Imposed by the Central Government, CGST ensures to replace all other Central taxes inclusive of State Tax, CST, SAD, etc.
- The Integrated Goods and Services Tax (IGST)
IGST is applied on the interstate transactions of goods and services. IGST is also applicable on the goods being that are imported to distribute among the respective states. The IGST is levied when the movement of products and services occur from one state to another.
- The Union Territory Goods and Services Tax (UTGST)
Applicable on the Intra Union Territory supply of goods and services, the aim to impose UTGST is to apply a collection of tax to provide benefits as same as SGST. The UTGST is applicable to five Union Territories namely Lakshadweep, Damn and Diu, Dadra and Nagar Haveli, Andaman and Nicobar Islands, and Chandigarh.
FEATURES
- Charged on goods and services only
- Regressive in Nature
- Burden of paying tax shifted to the third person
- Major source of revenue for government
- No feeling of paying tax in certain cases
Benefits of GST
- Eradicates the cascading tax effect
- Allows higher threshold to businesses for registration
- Composition scheme for small business operations
- Easy and Convenient online processes
- Lesser Tax Compliance
- Enhanced Efficiency of logistics
Exceptions
- Petroleum products and alcohol liquor for human consumption are outside the preview of GST.
- Basic Custom duty still continues to be applicable on pert imports.
- Stamp duty still continues to be charged on purchase( transfer) of immovable property.
