Answer By law4u team
GST stands for Goods and Services Tax. It is a comprehensive indirect tax levied on the supply of goods and services across India. Introduced on July 1, 2017, GST replaced multiple indirect taxes like VAT, service tax, excise duty, and others, creating a single unified tax system. Key Features of GST in India: 1. Unified Tax Structure: GST subsumes various central and state taxes into one, simplifying the tax system. 2. Dual GST Model: GST has two components: CGST (Central GST): Collected by the Central Government on intra-state supplies. SGST (State GST): Collected by the State Government on intra-state supplies. For inter-state supplies, IGST (Integrated GST) is collected by the Central Government and shared with states. 3. Destination-Based Tax: GST is levied where the goods or services are consumed, not where they are produced. 4. Input Tax Credit (ITC): Businesses can claim credit for the tax paid on inputs, reducing the cascading effect of taxes. 5. Threshold Limits: Small businesses under a certain turnover limit are exempt or can opt for a composition scheme with simpler compliance. Benefits of GST: Simplifies taxation by reducing multiple taxes to one. Promotes ease of doing business by creating a common national market. Increases transparency and accountability in tax collection. Avoids tax-on-tax (cascading effect). Boosts exports and economic growth. GST Rates: Goods and services are classified into different tax slabs — 0%, 5%, 12%, 18%, and 28%, depending on the type of goods or services. Summary: GST in India is a unified indirect tax system that replaced multiple taxes, making tax collection simpler, transparent, and more efficient. It is governed by the GST Council and administered jointly by the Central and State governments.
