GST

GST is an indirect tax that is levied on goods as well as services. All the existing state and central indirect taxes are subsumed under the GST. GST levied on supply of goods or services or both at each stage of supply chain starting from manufacture or import and till the last retail level. So basically any tax that is presently being levied by the Central or State Government on the supply of goods or services is Goods and Service Tax.

Another very significant feature of GST is input tax credit will be available at every stage of supply for the tax paid at the earlier stage of supply. This feature would mitigate cascading or double taxation in a major way.

This tax reform will be supported by extensive use of Information Technology [through Goods and Services Tax Network (GSTN)], which will lead to greater transparency in tax burden, accountability of the tax administrations of the Centre and the States and also improve compliance levels at reduced cost of compliance for taxpayers.

Benefits

• Under this system, a single product is taxed at the same rate in every corner of the country, hence deciding the applicable GST rate becomes convenient.
• Only GST registered business can charge or collect GST.
• Tax can legally be collected from purchasers and the credit of the taxes paid on the goods or services supplied can be passed on to the purchasers or recipients.
• There is a common portal for various requirements such as registration, tax payments, refunds, and returns.
• The Composite Scheme and its tax benefits can be availed by the entrepreneurs whose turnover is within the prescribed limit.
• Businesses prefer to choose GST registered entrepreneurs over the unregistered to avail the benefits of the input tax credit.