Taxes Levied Under GST



The Goods and Services Tax (GST) is a tax that applies to both goods and services. It is an indirect tax that was implemented to replace a variety of other indirect taxes such as VAT, service tax, purchase tax, excise duty, and so on. GST is a tax applied in India on the supply of certain goods and services. It is a single tax that is imposed across the country.

  • The goods and services tax (GST) is a consumption tax on products and services sold domestically.

  • The tax is included in the final price and is paid by customers at the time of sale, with the proceeds going to the government.

  • The GST is a worldwide tax that is utilized by the majority of countries.

  • In most cases, the GST is levied at a single rate across the country.


Some objectives of GST:

  1. To realise the philosophy of 'One Nation, One Tax’, GST has replaced several indirect levies that existed under the previous tax structure. The benefit of having a single tax is that each state applies the same rate to a specific product or service.

  2. One of the key goals of GST was to eliminate the tax cascading effect. Previously, taxpayers could not set off tax credits from one tax against tax credits from another owing to various indirect tax legislation. For example, excise charges paid during manufacturing could not be deducted from VAT due during the sale. This resulted in a taxation cascade.

  3. To combat tax avoidance: Taxpayers under GST can only claim an input tax credit on invoices filed by their respective suppliers. In this manner, the odds of obtaining input tax credits on forged invoices are reduced to a bare minimum.

  4. A more efficient logistics and distribution system: A unified indirect tax system eliminates the need for numerous forms of paperwork for the provision of products. GST, among other things, reduces transportation cycle times, improves supply chain and turnaround times, and leads to warehouse consolidation.


As of India, there are 4 different types of GST:

  • Integrated Goods and Services Tax (IGST)

  • State Goods and Services Tax (SGST)

  • Central Goods and Services Tax (CGST)

  • Union Territory Goods and Services Tax (UTGST)

  1. IGST stands for Integrated Goods and Services Tax. The Integrated Goods & Services Tax, or IGST, is a GST-based tax that applies to interstate (between two states) as well as imports and exports of goods and/or services. The IGST Act regulates the IGST. The Central Government is in charge of collecting the taxes under the IGST. The Central Government divides the taxes collected among the several states after they have been collected.

  2. SGST stands for State Goods and Services Tax. The State Goods and Services Tax, or SGST, is a tax levied under the GST regime on transactions that take place within the same state. Both State GST and Central GST are charged on intrastate supplies of goods and/or services. The State GST or SGST, on the other hand, is a tax collected by the state on products and/or services purchased or sold inside the state. The SGST Act is in charge of it. The revenue generated by the SGST is claimed only by the state government.

  3. CGST stands for Central Goods and Services Tax: The Central Goods and Services Tax (CGST), like State GST, is a GST-based tax that applies to intrastate (inside the same state) transactions. The CGST Act regulates the CGST. The Central Government is in charge of collecting the CGST income.

  4. UTGST stands for Union Territory Goods and Services Tax: The Union Territory Products and Services Tax (UTGST) is the Indian Union Territories' (UTs) counterpart to the State Goods and Services Tax (SGST), which is charged on the delivery of goods and/or services. In the Andaman and Nicobar Islands, Chandigarh, Daman Diu, Dadra and Nagar Haveli, and Lakshadweep, the UTGST applies to the provision of goods and/or services. The UTGST Act regulates the UTGST. The Union Territory government is in charge of collecting the UTGST revenue. In Union Territories, the UTGST takes the place of the SGST. As a result, in Union Territories, the UTGST will be imposed in addition to the CGST.


Recent-News On the recent update in India regarding GST is petroleum inclusion. After an extensive debate, it was decided to keep petroleum out of the ambit of GST. The rising price of petrol and diesel has raised pressure on the government to lower fuel taxes in order to keep pump prices in check. In many places around the country, the price of petrol has soared past ₹100-mark. The government has attributed the rise in local fuel costs to rising international crude oil prices. More than 80% of India's oil is imported, and the price of crude oil on the international market has a substantial influence on domestic fuel costs. High taxes, on the other hand, are considered a key factor in the rise in fuel costs. It should be remembered that more than half of the money spent on fuel by consumers goes to some form of tax or fee.


The matter was brought up for consideration during the GST Council meeting on September 17. However, it was determined that it was not the "appropriate moment" to include fuel in the GST system. As a result, customers will have to pay the high price of petrol and diesel for a longer period of time.


In other nations, many other nations, including India and many countries before India, have imposed this indirect tax. Since 1954, when France became the first country to apply the GST, an estimated 160 countries have implemented it in some form or another. Canada, Vietnam, Australia, Singapore, the United Kingdom, Monaco, Spain, Italy, Nigeria, Brazil, South Korea, and India are among the nations that have enacted a GST.


Conclusion

The implementation of the Goods and Services Tax (GST) was a landmark change in the realm of indirect taxes in our nation following independence. Multiple taxes levied and collected by the federal government and state governments have been replaced with a single tax known as the Goods and Services Tax (GST). GST is applied to the ultimate market price of goods and services produced in-house, resulting in the maximum retail price. Customers must pay this tax when they buy goods or services, and it is included in the final price. It is then needed to be paid to the government by the seller, meaning the indirect incidence.


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