GST full form – GST is an abbreviation for goods and services tax. GST is a system of indirect taxation in India, intended to provide simplified tax structure by removing cascading effect, and making Indian tax system more precise.GST is an abbreviation for goods and services tax. GST is a system of indirect taxation in India, intended to provide simplified tax structure by removing cascading effect, and making Indian tax system more precise. Click To Tweet
GST Full from, definition, objectives, slabs and Applicability -these topics are discussed in this article. You can read about the registration process here
Benefits of GST
A) Unified Tax Structure
GST makes things much more simpler. It brings unification to taxes irrespective states. It ensures India’s Taxation is matched with other countries which already adopted GST.
B) Destinations Based Tax
GST is a destination based Taxation. Which means, the tax is levied when it’s finally be consumed.
C) Addition of value
Tax is levied on each stage of supply chain. It ensures that the tax liability finally be transferred to the place where it is actually consumed.
D) Removal of cascading effect
Because of the all inclusive tax credit, It removes cascading effect. This means, the credit will be available for taxes paid earlier in the supply chain.
E) Single portal for single tax
All the tax will be paid using single channel of tax collection. The Goods and services Network has designed GST Portal where taxes are collected. It’s also a common portal for all the services provided under GST System.
There are four tax slabs as per the act – 5%, 12%, 18% and 28%.
Different Taxes Levied under GST
There are two kinds is tax levy when transactions take place within the state. They are –
- CGST : Central Goods and services Tax
- SGST : State Goods and Service Tax
If the transaction takes place between states, the following levy is applied –
- IGST : Integrated Goods and Services Tax
When to register for GST?
The registration for Goods and Service Tax is necessary under the following circumstances
- The Annual turnover exceeds 20 lakhs (10 lakhs for specified categories)
- Person/persons registered under previous tax laws
- Taxpayer who is liable to pay reverse charge
- E-commerce trader
- Online Service Providers
Read about GST reverse charge here
This post was last modified on July 16, 2018 6:20 pm