GST means Goods and Service Tax. After the enactment of various GST laws, Goods and Services Tax was launched all over India with effect from 1 July 2017 except Jammu and Kashmir. The Jammu and Kashmir state legislature passed its GST act on 7 July 2017, thereby ensuring that the entire nation is brought under a unified indirect taxation system. This law is levied on supply of taxable goods and services. It is possible that different provisions of the Act may be applicable from different dates to ensure that there is no simultaneous operation. GST is said to be a destination-based tax. It means that tax will finally accrue to the state where final consumption takes place. Final Consumption is called place of supply of goods or services. GST is charged on “supply” rather than on “sale” of goods or services. Therefore, even goods are supplied without a consideration, GST may be chargeable in certain cases.
The laws that govern taxes on Goods and Services are called GST Acts. Both Centre and State (or Union Territory) are the beneficiaries and hence there are two Acts to collect any transaction which happens within any state/union territory and one Act for supply between states or union territories.
Central GST Act (CGST)
State/Union Territory Act of the respective state Act (SGST/UTGST)
Integrated GST for inter-state transaction Act (IGST)
Apart from these Acts there is one more Act, The Goods and Services – (Compensation to States) Act, 2017 (GSTCS). This act is introduced to provide for compensation to the state for the loss of revenue arising on account of implementation of the goods and service tax. This tax is levied on few specified goods at present. It is expected that such levy will be collected for five years but this period can be extended on recommendation of the GST Council, the chairman of this council is the Union Finance minister of India.
Till the date of implementation of GST, there were several indirect and direct taxes in India which used to tax goods or service. They were -
Central Excise Duty
Central Sales Tax
Now all of the above will now be cancelled and there will be only GST.
After implementation of GST -
There is common tax for Goods and Services.
Taxes on taxes avoided.
Same Tax rate for a given commodity throughout the country.
Excise Duty abolished.
Many other indirect taxes abolished.
Seamless credit with respect to taxes paid on purchase of goods or on availing service.
It also takes care of giving credit for GST already paid by buyer of Goods or by person availing such services.
Although compliance in terms of filling of returns has increased, no. of taxes with respect to which compliance was required has gone down.