GST (Goods and Service Tax)

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GST (Goods and Service Tax)

The Goods and Service Tax is an indirect tax and it is a taxation system where there is a single tax in the economy for goods and services. This taxation system is meant to create a single taxation system in the entire country for all goods and services.
This system will have two components which will be known as:

Central Goods and Service Tax (CGST)

  • Central Excise Duty (including additional Excise Duty)
  • Service Tax
  • Additional Customs Duty
  • Special Additional Duty of customs
  • Central surcharges and Cess

State Goods and Service Tax (SGST).

  • Value Added Tax (TAX)
  • Central Sales Tax
  • Octroi & Entry Tax
  • Purchase Tax
  • Luxury Tax
  • Taxes on lottery, betting and gambling
  • State Cesses and Surcharges
  • Entertainment Tax

Advantages Of GST

  • GST is a transparent Tax and also reduce numbers of indirect taxes. With GST implemented a business premises can show the tax applied in the sales invoice. Customer will know exactly how much tax they are paying on the product they bought or services they consumed.
  • GST will not be a cost to registered retailers therefore there will be no hidden taxes and the cost of doing business will be lower. This in turn will help Export being more competitive.
  • GST can also help to diversification of income sources for Government other than income tax and petroleum tax.
  • Under Goods and Services Tax, the tax burden will be divided equally between Manufacturing and services. This can be done through lower tax rate by increase Tax base and reducing exemptions.
  • In GST System both Central GST and State GST will be charged on manufacturing cost and will be collected on point of sale. This will benefit people as prices will come down which in turn will help companies as consumption will increase.
  • Biggest benefit will be that multiple taxes like octroi, central sales tax, state sales tax, entry tax, license fees, turnover tax etc will no longer be present and all that will be brought under the GST. Doing Business now will be easier and more comfortable as various hidden taxation will not be present.

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