Oct 24, 2017
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Impact of GST on various other Indirect taxes in India

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Impact of GST in India :

Impact of GST mainly determine business that undergoing rapid transformation due to the globalization. Tax regime and policies of any country gaining high importance due to growing foreign trade between various countries. Thus the competitive world of business,GST is a significant topic which requires lot of deliberations from academia and industry to agriculture.

Despite the various impediments to the proposed transition, until the time GST implement, it would worthwhile to assess its positive impacts. However, its on such other various development areas viz. agriculture, manufacturing industry, MSME, housing, poverty reduction,etc.

Government has setup a body in order to make rules, regulation and to make amendment in case of GST which is known as GST council.

Impact of GST on various other Indirect taxes in GST India:

A common refrain in the popular discussions is what is the need for the introduction of GST?

To answer that question, it is important to understand the present indirect tax structure in our country. Presently:

  1. Central Government levies tax on manufacture (Central Excise duty)
  2. Provision of services (Service Tax)
  3. Interstate sale of goods (CST levied by the Centre but collected and appropriated by the States)
  4. State Governments levy tax on retail sales (VAT)
  5. Entry of goods in the State (Entry Tax)
  6. Luxury Tax
  7. Purchase Tax, etc.

Sr No.



Nature Levied on

Can be set off against

Covered by GST


Central Excise






Service Tax Centre Providing services 1,2



Customs Centre Import



Countervailing duty  (CVD) under customs Centre Additional Import duty (compensating Excise) 1,2



Special Additional duty (SAD) under customs Centre Additional Import duty (compensating state tax) 1,2



CST Centre Inter-state sales


7 VAT State Sales within states 7


However, its clearly visible that there are multiplicities of taxes which are being levied on the same supply chain. There is cascading of taxes, as taxes levied by the Central Government are not available as set-off against the taxes being levied by the State governments. Even certain taxes levied by State Governments are not allowed as set off for payment of other taxes being levied by them.

Post GST:

All the taxes mentioned earlier are proposed to be subsumed in a single tax called the Goods and Services Tax (GST) which will be levied on supply of goods or services or both at each stage of supply chain starting from manufacture or import and till the last retail level. So basically any tax that is presently being levied by the Central or State Government on the supply of goods or services is going to be converged into GST.

GST is proposed to be a dual levy where the Central Government will levy and collect Central GST (CGST) and the State will levy and collect State GST (SGST) on intra-state supply of goods or services. The Center will also levy and collect Integrated GST (IGST) on inter-state supply of goods or services.

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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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