GST ( Taxes Subsumed, Levy, Rates, Impacts of GST)

Taxes subsumed

 

A single GST replaced several existing taxes and levies which include:

1.  central excise duty, 
2. services tax, 
3. Additional customs duty, 
4. surcharges, 
5. state-level value added tax (VAT) and
6.  Octroi Duty. 
7. Other levies which were applicable on inter-state transportation of goods has also been done away with in GST regime.

Levy

 

(Levy means an act of levying a tax, fee, or fine.)

·              GST is levied on all transactions such as sale, transfer, purchase, barter, lease, or import of goods and/or services.

·         India adopted a new tax model i.e. dual GST model, meaning that taxation is administered by both the Union and State Governments.

·         Transactions made within a single state will be levied with Central GST (CGST) by the Central Government and State GST (SGST) by the government of that state. For inter-state transactions and imported goods or services, an Integrated GST (IGST) is levied by the Central Government.

·         GST is a consumption-based tax, therefore, taxes are paid to the state where the goods or services are consumed not the state in which they were produced. IGST complicates tax collection for State Governments by disabling them to collect the tax owed to them directly from the Central Government.

Rates

The GST is imposed at different rates on different items.

For Example

1.      The rate of GST is 18% for soaps and 28% on washing detergents.

2.      GST on movie tickets is based on slabs, with 18% GST for tickets that cost less than Rs. 100 and 28% GST on tickets costing more than Rs.100.

Note if you want complete rate list please visit:

http://www.cbec.gov.in/resources//htdocs-cbec/gst/goods-rates-booklet-03July2017.pdf

Impacts of GST

 

Following are the few impacts of GST

1.      The introduction of the GST increased the costs of most consumer goods and services in India including food, hotel charges, insurance and cinema tickets. Upon its introduction in the country, GST led to a number of protests by the business community, primarily due to an increase in overall taxes and hence the prices of goods.

2.      Check posts across the country were abolished ensuring free and fast movement of goods. Due to abolishing of the Check posts movement of the goods will increase due to which several benefits people will get.

3.  Control of black money circulation as the system normally followed by traders and     shopkeepers will be put to a mandatory check.
4. Boost to the Indian economy in the long run.