What is Goods and Services Tax?
Submitted by root on Sat, 07/15/2017 - 14:53
Goods and Services Tax (GST) refers to the single unified tax created by amalgamating a large number of Central and State taxes presently applicable in India. In 2004, Vijay Kelkar Committee recommended GST to replace indirect tax structure.
The salient features of GST are as under
► GST comes under the broad spectrum of what is known as Value Added Tax which provides for input credits and taxes only on the value addition that happened in the process of production/ provision of service.
► GST would be applicable on supply of goods or services as against the present concept of tax on the manufacture or on sale of goods or on provision of services.
► GST would be a destination based tax as against the present concept of origin based tax. i.e., tax is imposed at the point of consumption.
► It would be a dual GST with the Centre and the States simultaneously levying it on a common base.
► The Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of goods and services. There will be seamless flow of input tax credit from one State to another. Proceeds of IGST will be apportioned among the States.
Import of goods or services would be treated as inter-State supplies and therefore, would be subject to IGST in addition to the applicable customs duties. In other words, all imported goods will be charged integrated tax (IGST) which is equivalent to Central GST + State GST. This will bring equality with taxation on local products.