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A1 Docx 05 Oct 2024 6753

The Goods and Services Tax (GST) is a comprehensive, multistage, destination-based tax in India that replaced VAT and other indirect taxes on July 1, 2017. It categorizes goods and services into five tax slabs and excludes certain items like petroleum and alcohol, which are taxed separately. The GST aims to simplify the tax structure, improve interstate trade efficiency, and encourage consumers to request invoices through initiatives like the Invoice Incentive Scheme.

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14 views2 pages

A1 Docx 05 Oct 2024 6753

The Goods and Services Tax (GST) is a comprehensive, multistage, destination-based tax in India that replaced VAT and other indirect taxes on July 1, 2017. It categorizes goods and services into five tax slabs and excludes certain items like petroleum and alcohol, which are taxed separately. The GST aims to simplify the tax structure, improve interstate trade efficiency, and encourage consumers to request invoices through initiatives like the Invoice Incentive Scheme.

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n94268460
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The Goods and Services Tax (GST) is a successor to VAT used in India on the supply of goo

And service. Both VAT and GST have the same taxation slabs. It is a comprehensive, multistage,

Destination-based tax: comprehensive because it has subsumed almost all the indirect taxes

Except a few state taxes. Multi-staged as it is, the GST is imposed at every step in the production

Process, but is meant to be refunded to all parties in the various stages of production other than

The final consumer and as a destination-based tax, it is collected from point of consumption and

Not point of origin like previous taxes.

Goods and services are divided into 5 different tax slabs for collection of tax: 0%, 5%, 12%, 18%

And 28%. However, petroleum products, alcoholic beverages, and electricity are not taxed under

GST and instead are taxed separately by the individual state governments, as per the previous tax

System. There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on

Gold. In addition a cess of 22% or other rates on top of 28% GST applies on several items like

Aerated drinks, luxury cars and tobacco products. Pre-GST, the statutory tax rate for most goods

Was about 26.5%; post-GST, most goods are expected to be in the 18% tax range.

The tax came into effect from 1 July 2017 through the implementation of the One Hundred and

First Amendment to the Constitution of India by the Government of India. 1 July is celebrated as
GST Day. The GST replaced existing multiple taxes levied by the central and state governments.

Also, to boost GST billing in India, the Government of India, in association with state

Governments, has launched an “Invoice Incentive Scheme” (Mera Bill Mera Adhikaar). This will

Encourage the culture of customers asking for invoices and bills for all purchases. The objective

Of the scheme is to bring a cultural and behavioural change in the general public to ‘Ask for a

Bill’ as their right and entitlement.

The tax rates, rules and regulations are governed by the GST Council which consists of the

Finance ministers of the central government and all the states. The GST is meant to replace a

Slew of indirect taxes with a federated tax and is therefore expected to reshape the country’s $3.5

Trillion economy, but its implementation has received criticism. Positive outcomes of the GST

Includes the travel time in interstate movement, which dropped by 20%, because of disbanding

Of interstate check posts.

Definition of GST explain what GST is and it’s purpose in simplifying the tax structure in

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