Oct 6, 2017
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GST India: Overview on Goods & Service tax(GST)

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GST India

Goods and Service Tax (GST India) is an indirect tax which the Government of India is planning to levy on all goods and services apart from those exempted by the GST law. And for the same the GST valuation rules are being setup by government.

what is Goods & Service Tax in India or GST India?

  • GST India is applicable on ‘Taxable supply’ of goods or services as against the present concept on the manufacture of goods or on sale of goods or on provision of services.
  • GST based on the principle of destination-based consumption taxation as against the present principle of origin-based taxation.
  • In a recent meeting, the GST Council has decided that GST would be levied at four rates viz. 5%, 12%, 16% and 28%.
  • GST India would apply on all goods and services except Alcohol for human consumption.
  • Exports stated under zero-rated supplies. Thus, goods or services that are exported would not suffer input taxes or taxes on finished product.

What are the types GST in India?

    1.Central Goods and Services Tax (CGST)

It is also known as Central Tax. However, it is applicable on intra-state or intra-union territory without legislature supply of goods or services or both.

     2.State Goods and Services Tax (SGST)

It is also known as State Tax. However, it is applicable on Intra-state supply of goods or services or both.

     3.Union Territory Goods and Services Tax (UTGST)

It is also known as Union territory Tax. However, it is applicable on Intra-union territory supply of goods or services or both.

     4.Integrated Goods and Services Tax (IGST)

It is also known as Integrated Tax. However, it is applicable on Inter-state supply of goods or services or both.

(In case of import of goods also, the present levy of Countervailing Duty (CVD) and Special Additional Duty (SAD) would replaced by integrated tax.)

How is tax levied according to Goods and Service Tax act (GST)?

  • The GST levied on the intra-State supply of goods or services by the Centre is Central GST (CGST) and that by the States is State GST (SGST)

            ⇒ The taxes levied will be CGST + SGST

  • Integrated GST (IGST) collected by Centre and it is applicable on inter-state supply of goods and services. IGST is also applicable on imports.

(Illustration: Suppose goods worth Rs.1000 sold by manufacturer A in Maharashtra to Dealer B in Maharashtra. B resells them to trader C in Rajasthan for Rs.1750. Trader C finally sells to End User D in Rajasthan for Rs.3000.Suppose CGST= 9%, SGST=9%. Therefore, IGST=9+9=18%.


 A is selling this to B in Maharashtra itself      ⇒     Intra-state sale and both apply

                                                                                                          CGST @9% + SGST@9%


 B (Maharashtra) is selling to C (Rajasthan)  ⇒     Interstate sale –> IGST@18%  will apply


 C (Rajasthan) is selling to D in Rajasthan     ⇒      Intra-state sale and both apply

                                                                                                        CGST @9% + SGST@9%)

  • A union territory is directly under the governance of the Central Government. This differentiates them from the states, which have their own elected governments.
  • Since, SGST Act not applicable to union territory without its own legislature.
  • Hence,the GST Council has introduced the Union Territory Goods And Services Act (UTGST) to levy a tax, called UTGST.
  • Following are union territories where UTGST applies are Chandigarh, Lakshadweep, Daman and Diu, Dadra and Nagar Haveli and Andaman and Nicobar Islands .
  • Among these, Delhi and Puducherry have their own legislature, with elected members and a Chief Minister. Hence, they function as semi-states.
  • This means that on supplies within the union territories of Delhi and Puducherry, the taxes levied will be CGST +SGST, and on supplies from Delhi/Puducherry to another state/union territory, the tax levied will be IGST.

Is GST beneficial to consumer?

⇒ For consumers GST will help bringing in the following benefits

  1. Uniformity in Computing Taxes for Goods and Service
  2. Uniform Tax Regime
  3. Elimination of Double Taxation
  4. More Transparent Pricing
  5. One of the main objectives of Goods & Service Tax (GST) would be to eliminate the double taxation i.e. cascading effects of taxes on production and distribution cost of goods and services.

For finding lawyers related to Corporate Affairs & Taxation, visit Nearlaw

Article Categories:
Goods & Services Tax Act(GST)

Renuka is a Final Year LL.B. student at Siddharth College of Law. She has done her Bachelors in Banking & Insurance and has also completed her Masters in Business Management . She likes to participate in legal workshops and Moot Courts. Besides her interest in law, she has a keen aptitude for legal research and is good at putting her analysis into words.

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