Biggest tax reform happened, when GST in India got implemented on July 1, 2017.
Full form of GST in India is Goods and Service Tax.
What is GST, is question of all since last 2 years, so read below to solve the riddle.
There are two type of Taxes:
- Direct Tax: Direct Tax is Income Tax. Learn to know ways to save income tax, so click here. Income tax is the tax that a person pays on his Income, so it rises with rise in income. Wish to know about importance of filing income tax return, so click here. Regulatory authority of Income Tax and GST in India are different, so income tax has nothing to do with gst.
- Indirect Tax: Indirect Tax included Service tax, Excise Duty, Vat, Central Sales Tax and Entertainment tax prior to GST in India. There are about 17 taxes in it. After implementation of GST in India, all above mentioned taxes have been abolished.
Earlier, businessman had to deal with lot of departments to get things done. There were different set of rules in every state, so the taxes on multiple level. This resulted in tax on tax, so of prices of goods and services.
All the taxes has been abolished and GST is introduced in India. This tax was imposed in India on 1st July, 2017.
What is GST in India?
GST means good and service tax. GST introduced in India, so goods and expensive services became cheape.
As of now, you might have got bit idea of your question, what is GST? Let’s continue with type of GST.
Types GST imposed on goods and services are CGST, SGST and IGST
- SGST/ CGST: SGST means state goods and service tax. CGST means central goods and service tax. These are similar kind of taxes. The proportion of SGST and CGST is equal. If on goods tax is 5% then it will be 2.5% of CGST and 2.5% of SGST.
Example: CGST and SGST will be charged by registered dealer of Delhi, making sales in Delhi.
- IGST: IGST means integrated goods and service tax. It is imposed on inter-state sale of goods and services.
Example: Registered dealer of Delhi will charge IGST on sales in UP.
Registered dealer means those dealers, who have obtained GST Registration Online. You may also obtain GST registration online. To know more, please call us on number mentioned below.
There are 5 different rates of taxes in India:
- 0% Tax: This head includes items which will not be taxed like fish, eggs, milk, meat, chicken, vegetables, honey, bread, etc.
- 5% Tax: This includes packaged goods like branded cheese, coffees, tea, spices, pizza, bread, etc. This also includes railway & airline services.
- 12% Tax: This includes butter, cheese, ghee, dry fruits, snacks and mobile phones.
- 18% Tax: This includes pasta, cornflakes, pastries, soups, ice cream, camera, optical fiber cable, etc.
- 28% Tax: This includes chewing gum, deodorants, shaving creams, hair shampoo, Automobile, Motorcycle, etc. 5 Star Hotels will also have to charge 28% gst on services.
All above might have bought you closer to your question, what is GST? Now we shall discuss effects of GST on General Public:
- Prices of goods will decrease, resulting in relief to their pockets.
- Prices of services will increase, resulting in burden to their pockets.
Thank You for Reading!!