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GST - Know Goods & Services Tax

A Y STUDIOS August 25, 2019

GST - Know Goods and Services Tax


1) What Is GST ?


GST stands for "Goods and Services Tax" was introduced in India on 1 July 2017. GST has been introduced to replace multiple indirect taxes by State and Central government to simplify Indirect Tax System in India. GST replaced 17 State and Central Indirect Taxes such as Central Excise Duty, service tax, VAT, etc.

GST - Know Goods & Services Tax

It is applicable on supply of Goods and Services , so that's why it is called as Goods and Services Tax. GST is one indirect tax applicable for entire country (INDIA). GST is a multistage Tax which is applicable to every stage of production of goods and services such as , from Purchase of Raw Material > Production of Goods > upto consumer . The tax is applicable to each and every stage from production of goods to the purchase from a consumer.

2) Advantages of GST 

GST will remove the cascading effect on the sale of goods and services. This will directly impact on the cost of goods. Here are some hilights of advantages of GST.
      1. Removing Cascading Tax Effect
      2. Lesser Compliance
      3. Increased Efficiency in Logistics
There are more advantages of GST, so we are not going to tel the all here .

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3) Components of GST

There are three components of GST called as CGST , SGST and IGST. Just take a look at that.

  • CGST   :     Collected by the Central Government on an intra-state sale 
  • SGST   :     Collected by the State Government on an intra-state sale 
  • IGST    :     Collected by the Central Government for inter-state sale 
  • UTGST :   Union Territories Goods & Services Tax 

You can search about it on google , so we can go forward in this article.


4) Before GST , Tax Laws

Here are all the Taxes before GST .

  • Central Excise Duty
  • Duties of Excise
  • Additional Duties of Excise
  • Additional Duties of Customs
  • Special Additional Duty of Customs
  • Cess
  • State VAT
  • Central Sales Tax
  • Purchase Tax
  • Luxury Tax
  • Entertainment Tax
  • Entry Tax
  • Taxes on advertisements
  • Taxes on lotteries, betting, and gambling

So , all the taxes mentioned above has been replaced by CGST , SGST and IGST.

5) Disavdvantages of GST

As there are advantages of GSt , some economists in India say that there are also some Disadvantages of GST as follows.
 
1. Some economist said that GST would negatively affect real estate market in India.
2. It would add upto 8% to the cost of new homes and would decrease its demand by 12%                        approximately.
                                          There are many advantages of GST to a common man ,but we have not mentioned them here.

Burden of GST :

So, as an Indirect Tax the burden of GST is shifted from person to person. It means unlike DIRECT TAX, GST is ultimately is charged to the consumer and not the person between this chain, like wholesaler or trader or any dealer. GST is charged to the consumer. Everybody pays GST on goods as well as services but it is BORNE BY CONSUMER

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