My salutations to all, many people must have come to mind that what is gst? What are the types of GST? In India, a lot of tax is paid, but what type of tax is GST, today we will know in detail.
What is the meaning of GST?
The full name of GST is Goods and Service Tax which is a replacement tax of Excise Duty, VAT, Services Tax and other indirect taxes. In simple language, other indirect taxes like Excise Duty, VAT, Service Tax have been removed and replaced by one. The tax system GST was started so that all those indirect taxes can also be collected.
When was the GST system started?
Actually, the GST scheme was first done in the year 2000.
Atal Bihari Bajpayee’s government at the time of the then government of India. GST was proposed. At that time the Finance Ministers of all the states of India had formed a committee to prepare the GST structure based on the experience of the VAT structure of their respective states. Examine all aspects and prepare reports on thresholds, exemptions, taxation of inter-state supplies and taxation of services.
It took 17 years to develop this new tax system and finally got approval on the Lok Sabha and Rajya Sabha in the year 2017 and on July 1 of that year, GST was brought into law across the country.
Which indirect tax was removed from GST?
- Central Tax :-
- Central Excise Tax (Excise Duty)
- Central Sales Tax
- Service Tax
- Additional Duties of Customs
- Additional Duties of Excise
- Excise Duties levied under the Textiles and Textiles Products
- State Tax :-
- Purchase Tax
- Central Sales Tax
- Surcharges and CESS
- Entry Tax
- Taxes on Lottery, Gambling and Betting
- Taxes on Advertisements
Type of GST
There are 3 types of GST
- CGST – When any goods are sold within a state, then the GST which is collected by the Central Government of India.
- SGST When some goods are sold within a state, then along with the central government, the state government also has to pay tax. The tax we pay to the state government is called SGST or State GST.
- IGST When any goods are sold between two states, the tax collected by the central government is called IGST.
In simple language, if any goods are sold within a state, then both the central government and the state government have to pay tax. (CGST + SGST) And when goods of one state are sold in another state, then only the central government has to pay tax. (IGST)
Benefits of GST
One Nation One Tax Law
Before the introduction of GST, the tax system used to be very complex. In each of the states of the country, their own tax laws used to run. It used to be different in the states. Due to all this, the states were benefited and it had a bad effect on the economy of the country. Therefore, by imposing the same tax law for the whole country, the differential tax system should be stopped in all the states. Gaya and the country’s economy improved slightly.
control over the price of goods
The tax system before GST used to levy a lot of tax on goods, as mentioned on the above point, each stage of production of a commodity was taxed till it was sold to the final consumer. Due to the passing of various stages of tax on a commodity, its price automatically increased, but with the help of GST, the price of the goods worked a little.
Small Businesses Benefited from GST Composition Scheme
In order to encourage less tax and tax compliance, composition scheme under GST was introduced. Small business owners registered under the scheme are required to pay a certain percentage of tax on their business. Also, unlike regular GST taxpayers Small businesses registered under the composition scheme are required to file a quarterly return. The following are the tax rates under the composition scheme:
- Small businesses with a turnover of Rs 1.50 crore will pay a direct GST rate of 1%. They will now file only one tax return.
- Small service providers with an annual turnover of Rs 50 lakh will now pay 6% GST instead of 18%.
Simplified the system of tax return
There were many indirect taxes on the previous tax system, so the registered businessmen for different indirect cars had to face many compliances.
- Product Duty Return – Monthly / Quarterly depends on the scale of the business unit. (Large Business, EOU or SSI)
- Service Tax – Half Yearly Return
- Value Added Tax – Monthly/Quarterly depending on the state which is responsible for collecting VAT.
I do not have to go through so many castes to return tax under GST. And anyway, due to the online system, GST registration and return filing became even easier.
- What is the full form name of GST?
Full form of GST Goods and Service Tax
- Who can file GST?
Only those whose annual income is 20 lakhs or more have to pay GST.
- How many times do I have to file GST in a year?
every month of the year.
- What happens if GST is not filed on time?
Penalty of 10% of the tax amount payable subject to a minimum of Rs.10,000.
It is certain that due to the impact of GST, the country’s economy has improved a bit and it has become easier for the taxpayers to return the tax. so guys today we What is GST? I have tried to understand about it in detail and if you liked this post, then definitely tell by commenting and share it with your friends. Thank you.