Do you know what is GST and how will it affect your life?
What is GST? The Goods and Services Tax Law Explained
Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that will be levied on every value addition.
In simple words, GST is an indirect tax levied on the supply of goods and services. GST Law has replaced many indirect tax laws that previously existed in India.
Find all about GST:
- What is GST?
- History of GST in India
- Advantages Of GST
- What are the components of GST?
- What changes does GST bring in?
One Nation, One Tax? Not Quite, Not Yet
- GST would apply to all goods other than crude petroleum, motor spirit, diesel, aviation turbine fuel and natural gas. It would apply to all services barring a few to be specified. With the increase of international trade in services, GST has become a global standard.
- GST will ensure that indirect tax rates and structures are common across India and increase the ease of doing business. This would make doing business in the country tax neutral, irrespective of the choice of place of doing business.
Your complete guide to GST rates is here
- The government has opted for four slabs for both goods and services — 5%, 12%, 18% and 28%. In addition, several items face zero levy, while bullion will attract 3% GST and luxury and sin goods that are in the top bracket will also attract a cess that will be used to compensate states for revenue loss.
How will GST help in getting rid of tax evasion?
- A comprehensive IT system, GSTN, will allot universal GST numbers (similar to PAN) to all manufacturers, traders, stockists, wholesalers and retailers. This will simplify the administration of indirect taxes and plug leakages. The government also plans to incentivise tax compliance by traders.
Whether the GST will be beneficial to the poor or not only time can tell. Prices of vegetables and fruits are likely to rise under the GST regime and services such as eating at restaurants will get more expensive. What will likely get cheaper are items such as clothes, as cascading taxes at various stages of manufacturing would no longer apply to them.
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References:
1. Cleartax.in
2. The Times of India
3. The Hindu
4. Image Source: Electrocom.in
References:
1. Cleartax.in
2. The Times of India
3. The Hindu
4. Image Source: Electrocom.in