Introduction

Goods and Services Tax (GST)

Introduction

The Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. It is a comprehensive, multi-stage, destination-based tax that has replaced many indirect taxes in India. The GST is levied at every stage of the supply chain, but the consumer bears only the final GST paid.

Concept

The GST is based on the concept of "One Nation, One Tax". It aims to create a unified common market by eliminating the cascading effect of taxes, promoting transparency, and increasing compliance. The GST is levied on the supply of goods and services, including imports. Exports are zero-rated.

Key features of GST:

• Destination-based taxation: GST is levied where the goods or services are consumed.
• Dual GST: It comprises two components: Central GST (CGST) and State GST (SGST).
• Input Tax Credit: Businesses can claim credit for the GST paid on inputs used in the supply of goods or services.

Benefits of GST:

• Reduced tax burden: Eliminates cascading effect of taxes.
• Simplified tax structure: Replaces multiple indirect taxes with a single tax.
• Increased compliance: Easier to comply with a single tax.
• Improved efficiency: Streamlines the tax administration process.
• Boost to economic growth: Promotes a unified common market and encourages investment.

GST Council:

The GST Council is a constitutional body that makes recommendations to the Union and State Governments on GST related matters. It comprises the Union Finance Minister, the Union Minister of State in charge of Revenue, and the Ministers in charge of finance or taxation of all the States.