Things You Should Know About GST:

At the stroke of midnight on June 30, 2017, our nation witnessed the biggest reform when we talk about the tax structure since the 1990s. The GST tax is the unified indirect tax to remove the old, redundant, and complex tax structure. As its notion says ‘One Nation, One Market, One Tax’, it’s indicative of the fact that how this tax reform will clear all the complexity of the various indirect taxes levied at the goods and services at various stages by both state and central government. The purpose of GST is to enable a centralized indirect tax structure across the country so that there would be transparency in the tax structure that wasn’t present in the previous tax structure and filled with various kinds of unnecessary taxes. 

GST will help remove the current tax structure in which both the state and central government take taxes separately on the final value of good at each stage. Instead, GST will be charged at each stage on the value-added on it with the proper set-offs included. Thus, the final consumer has to give tax based on the last dealer’s charged GST and not the full tax. In this article, we will tell you everything about the Goods and Services Tax by which you’ll know that it’s not that tough to understand it as it sounds. 

Different slabs and Rates of Goods and Services Tax:

Before GST, there were several central and state government taxes like VAT (Value-added Tax), Excise Duty, and Service Tax. It managed to remove all these complex taxes and now there are a total of three taxes under this system which are as follows.

1. CGST (Central Goods and Services Tax) - Charged by Central government on the intra-state transactions of goods/services
2. SGST (State Goods and Services Tax) - Charged by State Government on intra-state transactions of goods/services
3. IGST (Integrated Goods and Services Tax) - Collected by both the Central Government on the inter-state transaction of goods/services. The IGST will be approximately equal to the CGST and SGST. 

Having a 2.4 Trillion Dollar economy, our country needs such a centralizes tax structure to make way for new indirect tax management. Some various goods and services will be affected by this tax structure, and experts are saying the benefit of it can be seen in the longer term. The GST is divided into four slabs of taxes which are 5%, 12%, 18%, and 28% respectively. IN the tax slab of 28%, there is an additional a cess is charged on the top of the 28% on the automobiles, luxury, demerit, and sin goods (Alcohol, Tobacco, etc). There are around a total of 1300 Goods and 500 services that come under the different tax slabs of GST. The government has designed the uniform tax in such a way that they have kept the basic services and goods in the lower tax slabs and extravagance goods and services in the higher tax slabs. The percentage of goods and services which fall below or in the tax slab of 18% stands at 81%. And, only 19% of the total goods and services under the tax slab of 28%.

Benefits and Impact of GST on common men:

There are various benefits of Goods and Services Tax mentioned below.

• This unified tax helped in removing the tax on the tax system, hence the final cost of goods is a lot much lesser than it used to be.
• There is a lot more efficiency in the logistics sector after the GST implementation. 
• Since it is prominently technology-driven, the process is hassle-free.
• There has been a significant rise in the consumption of goods and services after this tax reform.
• It helped in efficiently organizing the unorganized market sector.
• The number of compliances is lesser than before.
• After this biggest tax reform of our country, it is expected that our country’s economy will rise by almost 2% in the next three to five years.
• Small businesses can have a lot more growth through a better composition scheme.
• E-commerce businesses will have a defined treatment, unlike the previous tax structure.