Types/Benefits/Rates of Goods and Services Tax(GST)

-


Types of GST

There are four different types of GST as listed below:

      The Central Goods and Services Tax (CGST)

      The State Goods and Services Tax (SGST)

      The Union Territory Goods and Services Tax (UTGST)

      The Integrated Goods and Services Tax (IGST)

1. The State Goods and Services Tax (SGST)

SGST is defined as one of the two taxes imposed on transactions of goods and services of every state. Levied by State Government of every state, SGST replaces every kind of existing state tax that include Sales Tax, Entertainment Tax, VAT, Entry Tax, etc. Under SGST, the State Government can claim the earned revenue.

2. The Central Goods and Services Tax (CGST)

CGST is referred as the Central Tax levied on transactions of goods and services which take place within a state. Imposed by the Central Government, CGST ensures to replace all other Central taxes inclusive of State Tax, CST, SAD, etc. Prices of goods and services under CGST are charged in accordance with the basic market price.

3. The Integrated Goods and Services Tax (IGST)

IGST is applied on the interstate transactions of goods and services. IGST is also applicable on the goods being that are imported to distribute among the respective states. The IGST is levied when the movement of products and services occur from one state to another.

4. The Union Territory Goods and Services Tax (UTGST)

Applicable on the Intra UT supply of goods and services, the aim to impose UTGST is to apply a collection of tax to provide benefits as same as SGST. The UTGST is applicable to five Union Territories namely Lakshadweep, Damn and Diu, Dadra and Nagar Haveli, Andaman and Nicobar Islands, and Chandigarh.


Benefits of GST

GST presents a transparent tax system imposed on the supply of goods and services. When an item is bought, a common individual sees only the state taxes applicable on the product label and not the various tax components embedded on the product.

The aim of imposing GST is to improve the ease of business operations by enhancing tax compliance, boosting revenue receipts of both central and state government and accelerating economy growth. Eradication of cascading of taxes result in lowered tax burden on many products.

Following are the few benefits of GST mentioned below:

·  Eradicates the cascading tax effect

·  Allows higher threshold to businesses for registration

·  Composition scheme for small business operations

·  Easy and Convenient online processes

·  Lesser Tax Compliance

·  Enhanced Efficiency of logistics

Products not a part of GST

Diesel, Crude oil, petrol, natural gas, and jet fuel are not involved under GST as of now. Liquor is kept out of GST and therefore it would require an amendment under constitutional provision to be brought into GST net.

How are decisions taken at the GST Council?

Decisions cannot be taken in the Council without the agreement of both The Union and the State Governments. A 75% majority of the weighted votes of members present and voting are eligible to take decision.


GST Rates in India

There are four slabs categorized based on goods and services, as proposed by the Government:

5%: Under this slab, household items are included like sweets, sugar, spices, tea, coffee, coal, edible oil, etc.

12%: Under this slab, computers and processed foods are included like cheese, ghee, ayurvedic medicines, cell phones, and fertilizers, etc. Services like work contracts, business-class air tickets, and non-ac hotels are also included.

18%: This slab qualifies for toothpaste, soaps, hair oil, etc. as well as capital goods and industrial intermediaries.

28%: This slab involves luxurious items such as premium cars, consumer durables – AC, Refrigerators, etc.


Comments

Post a Comment

Popular posts from this blog

VIRTUAL ACCOUNTING

-
Image
  What is Virtual Accounting? Virtual accounting is a system in which a qualified professional provides accounting services virtually, rather than physically working at the client’s office. Virtual accounting offers all of the same benefits of hiring an accountant for your business, but because the accountant telecommutes and is a contractor, the cost is often less expensive. These services allow for more flexibility for the business and the accounting professional.   How Virtual Accounting Services Can Help Your Business Virtual accounting services allow companies to handle all of their accounting needs via a qualified accounting professional without having to hire another full-time staff member. This helps cut costs by ensuring that businesses only pay for the accounting work they need. This is a great accounting solution for small businesses who need help with their accounting but do not have the budget for another full-time employee. Virtual accounting servic...
Read more

International Financial Reporting Standards (IFRS)

-
International Financial Reporting Standards (IFRS) IFRS are designed to bring consistency to accounting language, practices and statements, and to help businesses and investors make educated financial analyses and decisions. The IFRS Foundation sets the standards to “bring transparency, accountability and efficiency to financial markets around the world… fostering trust, growth and long-term financial stability in the global economy.” Companies benefit from the IFRS because investors are more likely to put money into a company if the company's business practices are transparent. IFRS are used in at least 120 countries, as of March 2018, including those in the European Union (EU) and many in Asia and South America, but the U.S. uses Generally Accepted Accounting Principles (GAAP) . The U.S. Securities and Exchange Commission(SEC) has said it won't switch to International Financial Reporting Standards, but will continue reviewing a proposal to allow IFRS information to ...
Read more

GST Registration & Documents Required for GST Registration

-
Image
What is GST Registration In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. This process of registration is called GST registration. For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply. GST registration usually takes between 2-6 working days. We’ll help you to register for GST in 3 easy steps. *CBIC has notified the increase in threshold turnover from Rs 20 lakhs to Rs 40 lakhs. The notification come into effect from 1st April 2019. Who Should Register for GST? ·         Individuals registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.) ·         Businesses with turnover above the threshold limit of Rs. 40 Lakhs* (Rs. 10 Lakhs for North-Eastern ...
Read more