Main Features of Goods And Service Tax (GST)
- GST (Goods and Services Tax) is a system of taxation of goods & services in which tax paid on inputs of goods and services is given credit against the tax payable on output
- GST is a destination based tax instead of being origin based, as earlier. This means that the state, where goods and services are finally going to be consumed, will get the tax
- GST will be levied on supply of goods and services. Every supply of goods or services other than those specifically exempt, will be taxed
- GST is a dual tax system, wherein CGST ( Central GST) and SGST (State GST) will be levied on every transaction by Central and State authorities concurrently
- CGST will subsume seven central taxes / duties and SGST will subsume nine state taxes /cesses. Thus, leading to freedom from multiple inter- face with tax departments
- Rates of GST will be decided mainly on the basis of neutral revenue considerations, i.e., the rates that will yield equivalent revenue
- Rates once decided will be changed only after approval of GST Council
- Threshold for both the taxes, which is being fixed, will be common for both SGST and CGST
- Basic features of Central and State GST laws shall be same for the Centre and all the States. A model law has already been drafted for the purpose
- PAN (Permanent Account Number) shall be compulsory for registration under GST. The registration number under GST, known as GSTIN, will be a PAN based number
- There shall be a single return for both the taxes
- There will be no cross utilization of ITC (Input Tax Credit) between CGST and SGST and vice - versa
- Inter-state supply of goods and services is to be taxed under IGST (Integrated GST) which is to be levied and collected by Centre
- The Central Sales Tax Act will not apply to transactions of goods and services covered by GST
- Export will be zero- rated but ITC on purchases will be available
- Import from outside the country will be treated as inter - state supply and IGST will be levied on it in addition to custom duty
- Alcoholic liquor for human consumption is to be kept out of the purview of GST
- GST on Petroleum crude, HSD, Petrol, ATF and Natural Gas will be imposed after the GST Council fixes a date for it
- The IT infrastructure will be managed by a non-profit, non- government company known as GSTN (GST Network)
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