GST is the acronym for Goods & Services Tax. It is a form of indirect tax that will combine the different taxes charged by the State and Central government into one comprehensive Tax. GST has been introduced under 122nd amendment of the Indian Constitution as “The Constitution Act 2017”. The GST Council, chaired by current Union Finance Minister Arun Jaitley, has been bestowed with the governance of GST. It has been officially launched all across India on July 1 by our honorary PM Narendra Modi online trademark registration.
GST will combine all these following taxes-
- Commercial Tax
- Central Excise Duty
- VAT or Value Added Tax
- CST or Central Sales Tax
- Food Tax
- Entry Tax
- Entertainment Tax
- Luxury Tax
- Purchase Tax
- Advertisement Tax
Major terms related to GST-
- GST– Goods & Services Tax.
- Indirect Tax- the tax whose liability is shared with others.
- Multi-stage tax– Tax that applies to each stage of value addition i.e., right from manufacturing to final sale.
- Destination-based tax– GST framework would vary between inter-state and intra-state level transactions.
- CGST– The acronym for Central Goods & Services Tax. In this case, it’s the Central government which will collect the revenue.
- SGST– The acronym for State Goods & Services Tax. In this case, it’s the State government which will collect the revenue.
- IGST– The acronym for Integrated Goods & Services Tax. In this case, it’s the Central government which will collect the revenue from the inter-state sales.
- GST Compliance Rating– refund claims made under GST would be considered on the basis of merit. It would be processed depending on registered taxpayer’s compliance rating.
- GSTIN– It is the acronym for Goods & Services Tax Identification Number. It will be a unique 15 digit code that would be assigned to each businesses falling under GST regime.
GST has introduced two new terms:
- Mixed Supply– Two or multiple individual goods/services supplies, made together by a taxable individual for the single price. But each item here carries the capacity of being supplied and taxed separately.
- Composite supply-naturally grouped supply made of 2 or multiple goods or services. One would be the principal supply. Unlike mixed supply, the items do not carry the capacity of being supplied separately Immigration services Integrating highly skilled tax preparation with reliable and personalized service, Unidos Tax & Immigration Services helps Visalia residents achieve their financial goals…
- India will practice dual GST framework
- CGST (Central Goods & Services Tax) & SGST (State Goods & Services Tax) would be levied at intra-state level transactions
- Only IGST (Integrated Goods & Services Tax) would be levied inter-state level transactions
- Exports & SEZ supplies would be zero-rated
- Imports would be processed as inter-state supply
How will GST work?
As we can see from the GST framework above, GST would comprise of 3 taxes- CGST, SGST, and IGST