GST

GST 

GST is referred as Goods and Services Tax. It is an indirect tax that was implemented to replace a variety of previous indirect taxes. Including  the value add tax, service tax, purchase tax, excise duty, and others. GST is a tax that India imposes on the supply of specific products and services. There is only one tax that is imposed in India.

Goods and service are divided are into five different tax slabs for collection of tax: 0%,5%,12%,18%,and 28% , However , petroleum products, alcoholic drinks, and electricity are not taxed under GST and instead are taxed separately by the individual state governments , 

How GST Works in India?

• Manufacture:   The manufacture will have to pay GST on the raw that is purchased and the value that has been added to make the product.

• Service Provider: In This case, the service provider will be responsible for paying GST on both the product's purchase price and the value added to it. However, the manufacture 's tax payment may be deducted form the total GST that must be paid.

• Retailer: It must be paid by the retailer on both the product they bought from the distributor and the margin they added . However, the retailer's tax payment may be deducted from the total amount of GST that must be paid

• Consumer: GST that must be paid on the product that has been purchased

Types of GST in India

The four different types of GST are given below:

1. Central Goods and Services Tax : CGST is charged on the intra state supply of products and services.
2. State Goods and Services Tax : SGST, like CGST, is charged on the sale of products or services within a state.
3. Integrated Goods and Services Tax : IGST is charged on inter-state transactions of products and services.
4. Union Territory Goods and Services Tax : UTGST is levied on the supply of products and services in any of the Union Territories in the country, viz. Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep, and Chandigarh. UTGST is levied along with CGST.

History Of GST

On July 1st 2017, the Goods and Services Tax implemented in India. But, the process of implementing the new tax regime commenced a long time ago. In 2000, Atal Bihari Vajpayee, then Prime Minister of India, set up a committee to draft the GST law. In 2004, a task force concluded that the new tax structure should put in place to enhance the tax regime at the time.

In 2006, Finance Minister proposed the introduction of GST from 1st April 2010 and in 2011 the Constitution Amendment Bill passed to enable the introduction of the GST law. In 2012, the Standing Committee started discussions about GST, and tabled its report on GST a year later. In 2014, the new Finance Minister at the time, Arun Jaitley, reintroduced the GST bill in Parliament and passed the bill in Lok Sabha in 2015. Yet, the implementation of the law delayed as it was not passed in Rajya Sabha.

GST went live in 2016, and the amended model GST law passed in both the house. The President of India also gave assent. In 2017 the passing of 4 supplementary GST Bills in Lok Sabha as well as the approval of the same by the Cabinet. Rajya Sabha then passed 4 supplementary GST Bills and the new tax regime implemented on 1st July 2017.

Tax Laws Before the Implementation of GST

• The Centre and the State used to collect tax separately. Depending on the state, the tax regimes were different.
• Even though import tax was levied on one individual, the burden was levied on another individual. In the cases of direct tax, the taxpayer must pay the tax.
• Prior to the introduction of GST, direct and indirect taxes were present in India.