December 16, 2019
5 Rare Known things about GST
GST, or Goods and Services Tax, is one indirect and destination-based tax for the entire country. As per the GST, the tax is applicable at every point of sale. The main objective behind its implementation was to make a uniform tax system in the country. GST has also increased the total tax collection of the Indian government.
Let us have a look at five rare known things about GST, or Goods and Services Tax.
1. GST slabs
A great worry is the complexity of different GST slabs and numerous cesses which are completely different from simpler tax structure in other countries. Various shop owners are worried how they would maintain bill books due to the variety of tax slabs.
Let us understand the complexity with an example. There are multiple rates for different services in a restaurant – AC or non-AC, luxury category etc. A GST of 5% is paid by restaurants with turnover of less than Rs. 50 lakh. While the restaurants having turnover more than Rs. 50 lakh with no ACs will have to pay a GST of 12%.
2. Increased growth rate
After the implementation of the GST, the export of goods and services has become competitive due to nil effect of taxes done on goods and products. If we go by a research, GST is a crucial part of the growth in Indian Economy.
GST has increased the GDP and also the tax experts say that the growth has also increase around 1 to 2 percent. All this growth will increase the job opportunities along with increasing the productivity at the same time.
3. GST as per Indian Constitution
The Constitution 101st Amendment Act got the presidential assent on September 08, 2016. This act has created way for the introduction of the Goods and Services Tax by making some special provision with respect to the tax.
The GST is basically a VAT which is an indirect tax levied on manufacture, sale and consumption of goods and services at the national level.
The entertainment tax imposed on movie, theatre is subsumed in GST but the taxes on entertainment at district level will continue.
4. It was proposed way back
The Goods and Services Tax is a very old concept. They claim that they wanted to make this policy and implement it for the betterment of the country.
It was proposed by Vishwanath Prasad Singh in the year 1986 with a name of MODVAT which is a short of ‘modified value added tax’. He proposed this policy so as to abolish the different types of taxes imposed during the inter-state movement of commodities such as central excise duty and service tax.
5. Types of GST
GST is a destination-based tax as it is levied at the place where the supply of goods or services is done. Let us have a look at different types of GST.
SGST or State GST is levied on all intra-state supply of goods and services.
CGST or Central GST is levied by the Central Govt. on supply taking within a state.
IGST or Integrated GST is levied on inter-state supply of goods and on imports. It is first collected by the Central Govt. and then given to the states.
UTGST or Union Territory GST is levied on the supply of goods in the Union Territories of India.
GST, or Goods and Services Tax
These are some of the rare known facts about GST, or Goods and Services Tax. By now, GST has got the attention of every citizen of India as they are impacted by the rules set in the GST Act. Have any questions about GST and GST software? Feel free to ask us in the comment box!