GST took over VAT after 17 long years, which helped many Small and Medium Scale Businesses, eliminates corruption and frauds, got rid of double taxation and also reduced the cost of goods and services in India which helped lots of businesses and consumers all together. It has been a great change in the Indian Economy.
When was GST Introduced in India?
GST (Goods and Services Tax) an indirect tax was first suggested by the Prime Minister Atal Bihari Vajpayee in 1999, during a meeting with three former RBI governors. On July 17, 2000 the Prime Minister Atal Bihari Vajpayee and the Government put forth a GST model. After that GST was brought again during the Lok Sabha meeting but failed. After years of deciding whether or not it should be implemented, that’s when the Finance Minister Arun Jaitley introduced it to the Parliament and later it was launched by the Prime Minister Narendra Modi and the President Pranab Mukherjee at midnight on 1st July, 2017.
So, what is GST (Goods and Services Tax)?
Goods and Services Tax is an indirect tax which is imposed on the supply of goods and services with a multistage system. It’s used by the whole country thereby the sentence goes One nation One tax.
(A multi stage system GST is where single tax is charged for each production of goods and services till it reaches the consumers, i.e. from the manufacture of raw materials till its packed to the wholesalers , to the retailers and then to its end consumers.)
GST Slab Rates in India
The Government proposed tax rates for all the goods and services which are 0%, 5%, 12% , 18% and 28%. In the 37th GST Council Meeting they had introduced a new rate for cut and semi polished stones that is 0.25%. The goods and services, and the slab rates are mostly revised in the GST council meeting.
- On Goods
Slab Rates (%) Goods
0% Sanitary Napkins, eggs, flour, curd, Kajal, natural honey, oats etc.
0.25% Cut and semi polished stones
5% Spices, Frozen Vegetables, tea , Floor coverings, Fertilizers etc.
12% Almonds, Fruits, pickles, butter, cakes etc.
18% Washing Machines, vacuum cleaner, spectacles and computer monitor etc.
28% Sunscreen, motorcycles, cars, cement etc.
- On Services
Slab Rates (%) Services
0% Bank charges on the savings account etc.
5% Newspaper printing, tailoring, takeaway food, Ad space selling in print media etc.
12% Air travel apart from economy class, Crude or natural gas mining and drilling etc.
18% Outdoor catering, IT services, Telecom services etc.
28% Cinema, Food/Drinks/Stay at AC Five star Hotels etc.
Types of GST
GST can be divided into four types ,they are :-
- SGST (State Goods and Services Tax)
SGST is charged with the supply of goods and services within the state. The taxes collected by the State Government as the transactions are made within the state.
- CGST (Central Goods and Services Tax)
CGST is charged with the supply of goods and services of a particular state. The taxes are collected by the Central Government as the transactions are on an Intra State level. The State and the Central Government collects CGST together along with SGST or UTGST.
- IGST (Integrated Goods and Services Tax)
IGST is charged with the supply of goods and services that happens from one state to another. Exports and Imports are included as well. The tax collected is distributed between the Central and the State Government.
- UTGST (Union Territory Goods and Services Tax)
UTGST is charged with the supply of goods and services between the 5 Union territories except Jammu and Kashmir, Ladakh, Puducherry and Delhi. UTGST is collected by the Central Government as these 5 Union Territories don’t have their own legislature.
Pros of GST
- It reduces the cascading effects of tax i.e. tax on tax
- GST took over several indirect taxes such as VAT, excise duty, service tax, Advertisement tax, Luxury Tax etc.
- GST is also an advantage for small businesses as they have an option to either pay less tax or no tax depending on their turnover.
- GST improves transparency as consumers will know exactly how much tax they are paying for a particular good or a service, which is then divided into SGST and CGST.
- As GST is a single tax used by the whole country, this reduces corruption and tax evasion
- From Registration to filing returns in GST, has a simple online procedure unlike VAT
With the Introduction of GST in India, its meaning, GST Slab rates, Types of GST and Pros of GST, gives you a whole idea as to what GST is all about. GST has made huge impact in India and still has been effective till this date.
GST is also an excellent career option for many people in India .To those who are interested in pursuing a career in this field and want to become an expert, here is an Online Certified GST COURSE.