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Goods and Services Tax: Top 10 Key Facts about India’s GST
GST is a Goods and Service Tax, which puts the country’s indirect tax structure in one place. It was introduced to simplify the taxation system in India, the concept of GST is ‘One nation one tax’ in which all indirect taxes are put under an umbrella of GST. This step is taken to make Indian businesses globally competitive. And, after its launch, the GST registration increased tax compliance by bringing more businesses into the formal economy.
List of Top 10 Facts about GST
| Fact 1 | Implementation | The idea of GST was first introduced by the Kelkar Task Force on Indirect Taxes in 2000. The objective is to create a unified system to reduce tax cascading and promote economic integration. |
| Fact 2 | Launch | The GST was launched at midnight on 1 July 2017 by the President of India and the Government of India. This launch is marked as a historic midnight session. This is one of the few parliament sessions that have been held at midnight. The Assam was the first state to implement GST. |
| Fact 3 | Replaced Other Tax System | GST replaced multiple indirect taxes levied by the Central and State Governments, such as excise duty, service tax, value-added tax (VAT), and others. |
| Fact 4 | Basic Necessities | The healthcare, education and basic necessities sectors are either exempted from GST or have reduced tax rates to make the services affordable and accessible to all. |
| Fact 5 | Settlement of Accounts | The GST accounts are settled on a periodic basis between the Centre and State to ensure the credit of SGST is used for the payment of IGST that is transferred by the exporting state to the Centre. |
| Fact 6 | Modification in Rates | The GST rates after its launch have been modified multiple times, recently it was changed on 10th May 10th 2023 for taxpayers who had a turnover of more than Rs. 5 crore in any financial year from 2017-18 have issued an e-invoice w.e.f 1st April 2023. |
| Fact 7 | GST Boycott | The Congress Members have boycotted the GST launch by saying that there is no difference between the GST and the existing taxation system. Also said, that GST will increase the existing rates of common daily goods and reduce the tax on luxury items. This affects many Indians, especially the middle, lower and poor-income class. |
| Fact 8 | Variable Rates | The rates of GST are variable for variable items. For example, the rate of GST on soaps is 18% but 28% of washing detergents. The GST is not applied to goods such as cigarettes, tobacco-based items, alcohol for human consumption, petrol and petroleum products, and natural gas. These items have separate taxes. |
| Fact 9 | GST in other Countries | France was the first country to implement GST to reduce tax evasion. After that around 160 countries implemented GST and VAT on their goods and services. The GST is known by different names in different countries for example in the UK – it is a Value Added Tax, in Canada, it is known as Federal Goods and Service Tax & Harmonized Sales Tax. |
| Fact 10 | Dual GST Model | India has a dual-GST model, in this both the Central Goods and Services Tax (CGST) and State Goods and Service Tax (SGST) are both levy on the supply of goods and services simultaneously. The countries such as Brazil and Canada also follow a dual-GST model. |
The GST is an indirect tax also known as the consumption tax, implemented for different goods and services. It is imposed on multiple stages, such as in the manufacturing process, but it is refunded to all the parties involved in the manufacturing process other than the final consumer. GST tax rates fall into five tax slabs: 0%, 5%, 12%, 18% and 28%. Read more facts on RegistrationKraft about Insurance, Telecom, SEBI, and Business.
Categories: Taxation
Tags: Facts, Facts about GST, GST, GST Registration
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