Posts tagged ‘GST’
April 23, 2020, 9:19 pm
- GST (Goods and Services Tax) is an indirect tax which came into effect on 01-07-2017. It is levied on the supply of goods and services. It replaced many other indirect taxes that existed in the country and brought in one indirect tax for the entire country. It is a comprehensive, multistage, destination based tax, which is levied on every value addition.
- It is a multistage tax, as it is levied at various stages-from manufacturing to final sale to the consumer. It is levied on the value addition that happens at each stage, during the sale of a product. GST is destination based, as it is levied at the point of consumption- the entire tax will go to the place where the goods are finally consumed.
- Businesses whose turnover exceeds Rs 40 lakhs per annum (Rs 10 lakhs for North East and Hill states) require registration under GST Act and they will be provided a GST Identification Number(GSTIN).For few businesses GST registration is compulsory irrespective of the turnover limits.
- Advantages of GST:
- It removes the cascading effect( tax on tax effect) and attempts to reduce the cost of goods
- It is more technologically driven.
- There are 3 taxes that are under the GST regime:
- CGST- Central Goods and Services Tax-levied on intra state sales- Collected by Central government- 50% goes to the Central Government and 50% goes to the State Government
- SGST- State Goods and Services Tax-levied on intra state sales- Collected by State Government- 50% goes to the Central Government and 50% goes to the State Government
- IGST- Integrated Goods and Services Tax-levied on interstate sales-Collected by Central government and shared between Central Government and States.