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Note on GST

Ppyks

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5 views

Note on GST

Ppyks

Uploaded by

kavitakajal54321
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Introduction to GST

GST (Goods and Services Tax) is a unified indirect tax that replaced multiple indirect taxes like
excise duty, VAT, and service tax.

The GST Act was passed on March 29, 2017, and implemented on July 1, 2017.

Working of GST

1. Manufacturer: Pays GST on raw materials and value addition during manufacturing.

2. Service Provider: Pays GST on products and added value but can deduct input tax paid by
manufacturers.

3. Retailer: Pays GST on purchased goods and profit margins but can deduct input tax paid.

4. Consumer: Pays GST on the final product.

Types of GST

1. Central GST (CGST): Levied on intra-state supplies by the Central Government.

2. State GST (SGST): Levied on intra-state supplies by State Governments.

3. Integrated GST (IGST): Levied on inter-state supplies.

4. Union Territory GST (UTGST): Levied on supplies in Union Territories.

Objectives of GST

Implement "One Nation, One Tax."


Replace multiple indirect taxes.

Eliminate the cascading effect of taxes.

Reduce tax evasion.

Broaden the tax base.

Simplify business processes with online systems.

Promote competitive pricing and increase consumption.

Key Features of GST

1. Unified Tax: Replaces multiple indirect taxes with a single tax system.

2. Input Tax Credit: Enables deduction of input tax paid from the output tax liability.

3. GST Composition Scheme: Simplified tax scheme for SMEs with lower turnover.

4. Four-tier Tax Structure: Tax rates of 5%, 12%, 18%, and 28%, with exemptions for essential
goods.

Benefits of GST

1. For Businesses and Industry:

Unified tax system and reduced tax cascading.

Improved ease of doing business with online services.

Enhanced competitiveness due to reduced transaction costs.

Boosts exports by reducing indirect taxes.

2. For Governments:
Simplified tax administration with IT infrastructure.

Increased tax compliance and revenue efficiency.

Replaces multiple indirect taxes.

3. For Consumers:

Single tax from producer to consumer ensures transparency.

Lower overall tax burden due to efficiency gains

Conclusion

GST is transforming India's economy by streamlining the tax structure, benefiting businesses,
governments, and consumers. Despite challenges, its positive impact continues to grow.

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