The Goods and\nServices Tax (GST) is a comprehensive tax reform that eliminates cascading of\ntaxes and brings the concept of \u2018one nation, one tax\u2019 to light. Implemented\nfrom 1st July 2017, GST is considered to be a major tax reform in the Indian\neconomy.<\/p>\n\n\n\n
What is GST?<\/strong><\/p>\n\n\n\n The Goods and\nServices Tax is nothing but an indirect tax which is levied on goods and\nservices, at each point of sale or service rendered; thus, eliminating\ncascading taxes levied by Central and State Governments. Instead of a of the\nexcise duty (levied on goods) and service tax (levied on services rendered),\nGST is one single indirect tax levied combined on goods and services. This\nvalue-added tax is paid by the customer but is remitted to the government by business\nowners dealing in rendering services or selling of goods.<\/p>\n\n\n\n Objectives of GST<\/strong><\/p>\n\n\n\n \u2022 One of the major reasons for implementation\nof GST is to eliminate cascading of taxes that had an effect on the sale of\ngoods and services. <\/p>\n\n\n\n \u2022 This elimination will help to improve the\ncompetitiveness of goods and services, from a pricing point of view, thus,\nhelping the nation\u2019s GDP. <\/p>\n\n\n\n \u2022 Due to the cascading of taxes by State and\nCentral Governments, there was a lot of disparity in the tax system across the\ncountry and created a lot of confusion amongst the tax payers. <\/p>\n\n\n\n \u2022 Due to the single tax system, there will be\na reduction in tax compliances. <\/p>\n\n\n\n \u2022 This will also increase the tax to GDP\nratio and increase revenue surplus.<\/p>\n\n\n\n GST across the World<\/strong><\/p>\n\n\n\n Though this tax\nreform has been recently implemented in India, in about 150 countries across\nthe globe, GST has been implemented in some form or the other. In Singapore and\nNew Zealand, there is virtually a single tax rate whereas in Indonesia there is\nzero rate with 5 positive rates having 30 categories of exemptions. In China\nthough, GST is applicable only on goods and there\u2019s a provision of repairs,\nreplacement, and processing services. <\/p>\n\n\n\n Dual GST<\/strong><\/p>\n\n\n\n During the\nimplementation of GST, it was made very clear that India would adopt a Dual GST\nmodel. In this model, a CGST (Central Goods and Services Tax) and SGST (State\nGoods and Services Tax) will be applicable on every transaction of goods and\nservices. It is expected that there will be decrease in the effective tax rates\nfor many goods and also reduction in the transactional costs paid by the\ntaxpayers. <\/p>\n\n\n\n GST Rates<\/strong><\/p>\n\n\n\n The GST rates\nhave been fixed at 5%, 12%, 18% and 28% with special rates for precious metals\nand a list of exempted items.<\/p>\n\n\n\n GST seems to be the logical step taken towards improving the tax system in the country and bringing a tax reform. <\/p>\n","protected":false},"excerpt":{"rendered":" The Goods and Services Tax (GST) is a comprehensive tax reform that eliminates cascading of taxes and brings the concept of \u2018one nation, one tax\u2019 to light.<\/p>\n\n Tax Rates<\/strong>\n <\/td> \n Products<\/strong>\n <\/td> \n <\/strong>\n <\/td><\/tr><\/thead> \n 0%\n <\/td> \n Milk\n <\/td> \n Kajal\n <\/td><\/tr> \n Eggs\n <\/td> \n Educations Services\n <\/td><\/tr> \n Curd\n <\/td> \n Health Services\n <\/td><\/tr> \n Lassi\n <\/td> \n Children\u2019s Drawing & Colouring Books\n <\/td><\/tr> \n Unpacked Foodgrains\n <\/td> \n Unbranded Atta\n <\/td><\/tr> \n Unpacked Paneer\n <\/td> \n Unbranded Maida\n <\/td><\/tr> \n Gur\n <\/td> \n Besan\n <\/td><\/tr> \n Unbranded Natural Honey\n <\/td> \n Prasad\n <\/td><\/tr> \n Fresh Vegetables\n <\/td> \n Palmyra Jaggery\n <\/td><\/tr> \n Salt\n <\/td> \n Phool Bhari Jhadoo\n <\/td><\/tr> \n 5%\n <\/td> \n Sugar\n <\/td> \n Packed Paneer\n <\/td><\/tr> \n Tea\n <\/td> \n Coal\n <\/td><\/tr> \n Edible Oils\n <\/td> \n Raisin\n <\/td><\/tr> \n Domestic LPG\n <\/td> \n Roasted Coffee Beans\n <\/td><\/tr> \n PDS Kerosene\n <\/td> \n Skimmed Milk Powder\n <\/td><\/tr> \n Cashew Nuts\n <\/td> \n Footwear (< Rs.500)\n <\/td><\/tr> \n Milk Food for Babies\n <\/td> \n Apparels (< Rs.1000)\n <\/td><\/tr> \n Fabric\n <\/td> \n Coir Mats, Matting & Floor Covering\n <\/td><\/tr> \n Spices\n <\/td> \n Agarbatti\n <\/td><\/tr> \n Coal\n <\/td> \n Mishti\/Mithai (Indian Sweets)\n <\/td><\/tr> \n Life-saving drugs\n <\/td> \n Coffee (except instant)\n <\/td><\/tr> \n 12%\n <\/td> \n Butter\n <\/td> \n Computers\n <\/td><\/tr> \n Ghee\n <\/td> \n Processed food\n <\/td><\/tr> \n Almonds\n <\/td> \n Mobiles\n <\/td><\/tr> \n Fruit Juice\n <\/td> \n Preparations of Vegetables, Fruits, Nuts or other\n parts of Plants including Pickle Murabba, Chutney, Jam, Jelly\n <\/td><\/tr> \n Packed Coconut Water\n <\/td> \n Umbrella\n <\/td><\/tr> \n 18%\n <\/td> \n Hair Oil\n <\/td> \n Capital goods\n <\/td><\/tr> \n Toothpaste\n <\/td> \n Industrial Intermediaries\n <\/td><\/tr> \n Soap\n <\/td> \n Ice-cream\n <\/td><\/tr> \n Pasta\n <\/td> \n Toiletries\n <\/td><\/tr> \n Corn Flakes\n <\/td> \n Computers\n <\/td><\/tr> \n Soups\n <\/td> \n Printers\n <\/td><\/tr> \n 28%\n <\/td> \n Small cars (+1% or 3% cess)\n <\/td> \n High-end motorcycles (+15% cess)\n <\/td><\/tr> \n Consumer durables such as AC and fridge\n <\/td> \n Beedis are NOT included here\n <\/td><\/tr> <\/td> \n Luxury & sin items like BMWs, cigarettes and\n aerated drinks (+15% cess)\n <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n