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Goods and Services Tax (GST) is an Indirect Tax for the supply of goods and services in India. In other words, it is a tax that applies to most goods and services sold for domestic consumption.
The Goods and Service Act was passed on 29th March 2017 in the Parliament. It has now replaced many Taxes in India and it provides revenue for the government. The GST is a common tax and is taxed as a single rate across the nation and applies to goods and services including transportation services.
The Goods and Services Tax (GST) is applied to the cost of certain goods and services. Businesses that deal in goods and services add the tax to the retail price of their product and the consumer who purchases the product pays the retail price of the product plus the GST. The amount paid as GST is forwarded to the government by the business or the trader.
There are four types of GST and they are as follows:
CGST is a part of the Goods and Services Tax (GST) and falls under the Central Goods and Service Act 2016. This tax is payable to the centre. This tax is charged as per the Dual GST regime.
State Goods and Services Tax (SGST) is charged on the purchase of products within the state. This falls under the state government. This tax is payable to the state government.
SGST has replaced taxes like Entertainment Tax, State Sales Tax, Value-added Tax, Entry Tax, cesses and surcharges.
Integrated Goods and Services Tax (IGST) is applied on inter-state transactions. This tax is applied to the transfer of goods and services from one state to the other. The Central government collects this tax and distributes it to the state. This tax helps the states deal directly with the Central government rather than each state.
Union Territory Goods and Services Tax is applied to the supply of goods and services to any of the Union Territories of the country. These are Andaman & Nicobar Islands, Daman & Diu, Dadra & Nagar Haveli, Lakshadweep and Chandigarh. This tax is applied along with the Central Goods and Services Tax (CGST).
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The registration procedure is simple and can be done online.
The government has exempted certain goods and services of taxes.
The list of Goods are as follows:
|Goods with no GST Tax||Goods with no GST Tax|
|Raw Materials used for broom||Fruits|
|Handloom||Chickpea Flour (Besan)|
|Deities made of wood, marble, stone||Rakhis made without the use of precious metal like gold, silver|
|Fortified milk||Saal leaves|
Services with no GST tax are:
The government charges 5% GST on the following Goods and Services.
The list of Goods are as follows:
|Goods with 5% GST Tax||Goods with 5% GST Tax|
|Skimmed milk powder||Coal|
|Unbranded namkeen products||Ayurvedic medicines|
|Sliced dry mango||Cashew nuts|
|Lifeboats||Ethanol- solid biofuel products|
|Handmade carpets and textile floor coverings||Handmade braids and ornamental trimming|
Services with 5% GST tax are:
The government applies a tax slab of 12% to the following list of Goods and Services:
Here is the list of Goods:
|Goods with 12% GST Tax||Goods with 12% GST Tax|
|Frozen meat products||Butter|
|Umbrellas||Instant food mixes|
|Cell phones||Sewing machines|
|Man-made yarn||Handbags including pouches and purses|
|Jewellery Box||Wooden frames for photographs, paintings, mirrors, etc|
Services with 12% GST tax are:
The government applies this tax-slab to the following list of goods and services
The Goods are as follows:
|Goods with 18% GST Tax||Goods with 18% GST Tax|
|Flavoured refined sugar||Cornflakes|
|Pasta||Pastries and Cakes|
|Detergents||Washing and cleaning items|
|Deodorants||Suitcase, briefcase, vanity case|
|Shaving and after-shave items||Facial make-up items|
|Washing powder, detergents||Refrigerators|
|Washing machine||Water heaters|
|Paints||Hair shavers, curlers, dryers|
|Perfumes||Marble and granite stone used for flooring|
|Artificial fruits, flowers||Foliage|
|Physical exercise equipment||Musical instruments and their parts|
|Stationery items like clips||Few diesel engine parts|
|Few parts of pumps||Electrical boards, panels, wires|
|Razor and razor blades||Furniture|
|Mattress||Cartridges, multi-functional printers|
|Aluminium frames||Monitors and television screens|
|Tyres||Power banks for lithium-ion batteries|
|Video games||Carriage accessories for disabled, etc|
|Aluminium foil Furniture||Padding pools Swimming pools|
|Bamboo||Cigarette Filler Rods|
|Bio-fuels Powered Buses||Second-hand large and medium cars and SUVs|
Services with 18% GST tax are:
The government applies a tax-slab rate of 28% for the following items
The Goods are as follows:
|Goods with 28% GST Tax||Goods with 28% GST Tax|
|Waffles and wafers coated with chocolate||Sunscreen|
|Aircraft for personal use||Pan masala|
|Yachts||Weighing machine ATM|
|Vending machines||Aerated water|
Services with 28% GST tax are:
GSTIN is a 15-digit distinctive code that is provided to every taxpayer. It is provided based on the state you live and the PAN.
Some of the main uses of GSTIN are as follows:
A GST-Return is a document that contains the information of the Income that a taxpayer should file with the government authorities. Registered traders are to file their GST Returns with details regarding their purchases, sales, input tax credit and output GST.
The first country to bring in GST was France. It implemented GST in 1954 and since then about 160 countries worldwide have roped in GST. Some of the countries with GST are Canada, Australia, Singapore, India, Vietnam, Monaco, Spain, Italy, United Kingdom, Nigeria, Brazil and South Korea.
Business with an annual turnover of Rs. 20 lakh and more are required to register under GST system. The GST registration certificate is issued in Form GST REG-06, which is an official document issued by the concerned authorities for a business enrolled under this system. The certificate is available only in digital form, which means there is no physical copy issued.
GST Certificate contains following data:
The idea to bring GST into an active movement in India dates back to the beginning of the 21st century.
Here is the timeline:
|2000||The government headed by Atal Bihari Vajpayee were in talks about the GST. A committee was set up to plan the course of action headed by Asim Dasgupta, Finance Minister of West Bengal.|
|2003||A task force was set up under Vijay Kelkar, the then advisor to the Finance ministry. Tax reforms were to be suggested by the task force.|
|2004||Vijay Kelkar suggests replacing the tax regime with GST.|
|2006||Then Union Finance Minister, P.Chidambaram, proposed the implementation of GST by April 1, 2010, during the budget of 2006-07.|
|2008||The committee set up, submitted a report regarding the roadmap of GST if implemented in the country.|
|2009||The committee prepared a paper for discussing GST. Finance minister Pranab Mukherjee announced the basic structure for GST.|
|2010||Implementation of GST was postponed to April 1, 2011.|
|2011||The Congress Party introduced the Constitution (115th), Amendment Bill, for the implementation of GST. The Bill was passed to a standing committee after facing resistance from the Opposition.|
|2012||Meetings were held with state Finance ministers and the deadline for issues to be resolved is set for December 31, 2012.|
|2013||P. Chidambaram made the provision of Rs. 9,000 cr to compensate for losses due to GST.|
|2014||Just as the Standing Committee cleared GST for implementation, Lok Sabha dissolved and the Bill lapsed. New Finance Minister, Arun Jaitley, introduced the Constitution (122nd), Amendment Bill, in the Lok Sabha.|
|2015||A new date was set for the implementation of GST as April 1, 2016. GST Bill was passed in Lok Sabha but not in Rajya Sabha.|
|2016||Rajya Sabha passed the Constitution Amendment Bill. The GST council agreed on the four slab structure with an added cess for luxury and sin goods.|
|2017||GST was finally implemented on July 1, 2017.|
Well, Goods and Services Tax (GST) did face some flak as people had certain concerns regarding their spending capacity. However, recently it has been getting a positive response from the consumers in India because of its success.
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