What Is the Goods and Services Tax (GST)?

Finance
#1

The GST is a value-added tax paid on most products and services sold for domestic consumption. Consumers pay the GST, but companies selling the products and services must remit it to the government.
The goods and services tax (GST) is a federal indirect sales tax that is levied on the purchase price of certain products and services. The GST is added to the product’s price by the business, and the client pays the sales price, which includes the GST. The GST component is collected and remitted to the government by the company or seller. It’s also known as Value-Added Tax (VAT) in some cases.

#2

The goods and service tax (GST), commonly known as GST, was introduced on July 1st 2017.

This was the biggest tax reformation in India which aimed to create a unique taxation structure. It eradicated indirect taxes such as the VAT and Octroi and included them under a consolidated tax policy which is the GST.

Understanding the Goods and Service Tax:

  • GST is levied at the final point of consumption instead of being imposed at every stage of the manufacturing and distribution process

  • One of the many GST benefits is that it removes double taxation which is a tax on tax. It is accessible online, and therefore, activities such as registration, application, refund and return filing can be done via the online portal

  • A unique GSTIN is generated after the registration process which is a 15 digit code based on the applicant’s state and PAN card details

  • It provides a composition scheme for small businesses and offers much less compliance

  • There are 3 applicable taxes under GST. The Central government collects CGST. The SGST is collected by the State, and the IGST is by the Central again in case of interstate sales