What is GST?
It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition be taxed and burden of tax is to be borne by the final consumer.
Goods and Services Tax, a comprehensive indirect tax, would be the biggest reform in India’s indirect tax structure to be levied on manufacture, sale and consumption of goods and services throughout India.
It would be a dual GST with the Centre and States simultaneously levying it on a common tax base. The dual GST model would comprise of three types of taxation – Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) for intra-state transactions and IGST (Integrated GST) for Imports and inter-state transactions.
GST will lead to four tier rate structure so as to rationalize the taxation system
With the introduction of the GST, the following taxes would be subsumed which are currently levied by Central and State Governments: