2. What is GST
Goods & Service Tax or GST is an Indirect Tax levied on
the supply of goods and services. It has replaced various
indirect taxes and brought them under one umbrella to
make compliance easier. This article will help you
understand the taxes under GST regime.
3.
4. First GST in world
France was the first to introduce GST.
Only Canada has dual GST model(Just like
India is going to implement Dual GST
Model).
Currently almost 140 countries have
implemented GST with some countries
having Dual-GST ( e.g. Brazil, Canada
india etc.)
5. Country Rate of GST
Country Rates Country Rates
Australia 10% India 28%
France 19.6% Canada 5%
Germen 19% Japan 5%
Singapore 7% Sweden 25%
New Zealand 15% Pakistan 15%
Malaysia 6% Denmark 25%
United state 7.5% United kingdom 20
6.
7. CGST & SGST
(i) Taxes previously levied and collected by the Centre:
Central Excise duty
Additional Duties of Customs (commonly known as CVD)
Special Additional Duty of Customs (SAD)
Service Tax
AND
(ii) Taxes previously levied and collected by the State:
State VAT
Central Sales Tax
Entertainment and Amusement Tax (except when levied by the local
bodies)
Taxes on lotteries, betting, and gambling
Luxury Tax
Octroi
8. IGST
The GST levied on the intra-State supply of goods or services
by the Centre is Central GST (CGST) and that by the States is
State GST (SGST).
On inter-state supply of goods and services, Integrated GST
(IGST) is collected by Centre. IGST is also applicable on
imports.
GST is a consumption based tax i.e. the tax is received by the
state in which the goods or services are consumed and not by
the state in which such goods are manufactured. IGST is
designed to ensure seamless flow of input tax credit from one
state to another. Every state has to deal only with the Central
government to settle the tax amounts and not with every other
state, thus making the process easier.
9. Eg
– Rajesh, a dealer in Maharashtra sold goods to Anand
in Maharashtra worth Rs. 10,000. The GST rates is 18%
comprising of CGST rate of 9% and SGST rate of 9%,
in such case the dealer collects Rs. 1800 and Rs. 900
will go to the central government and Rs. 900 will go to
the Maharashtra government.
10.
11.
12. Why CGST, SGST & IGST?
India is a federal country where both the Centre and the
States have been assigned the powers to levy and collect
taxes. Both the levels of Government have distinct
responsibilities to perform, as per the Constitution, for
which they need to raise resources.
The Centre and States are simultaneously levying GST.
3 types tax structure is implemented to help taxpayers take
the credit against each other thus ensuring “One nation
one tax”.
