Goods and Service Tax (GST) is proposed to replace existing indirect taxes in India and be a game changer for the economy. GST will combine multiple taxes into a single tax to reduce compliance burden and increase tax collection. It is expected to lower prices by reducing the tax on tax effect and make exports more competitive. GST will have three components - CGST collected by the central government, SGST by state governments, and IGST on inter-state transactions. It is argued that GST will simplify tax administration and boost economic growth.

1. Goods and Service Taxes
Dr. Harishchandra S B
MBA, M.Phil, PhD
Dept of Management Studies [MBA], APPA Institute of Engineering &
Technology, Kalaburagi, Karnataka-India
harish.bramhaver@gmail.com 09945678951.
__________________________________________________________________
Abstract:-
Goods and Service Tax or GST as it is known is all set to be a game changer for the
Indian Economy in India. Traditionally India’s tax regime relied heavily on indirect taxes.
Revenue from indirect taxes was the major source of tax revenue till tax reforms were
undertaken during nineties. The major argument put forth for heavy reliance on indirect taxes
was that the India’s majority of population was poor and thus widening base of direct taxes had
inherent limitations. But the Indian system of indirect taxation is characterized by cascading,
distorting tax on production of goods and services which leads to hampering productivity and
slower economic growth. There are endless taxes in present system few levied by Centre and rest
levied by state, to remove this multiplicity of taxes and reducing the burden of the tax payer a
simple tax is required and that is Goods and Service Tax (GST).
Key Words- Service Taxes, GST, Liabilities, Money, Government, and Transaction.
Introduction
There are different indirect taxes applied on goods and services by central and state
government. GST is intended to include all these taxes into one tax with seamless ITC and
charged on both goods and services. Thus excise duty, special additional duty, service tax, VAT
to name a few will get repealed and will be added into GST. For this, GST will have 3 parts
CGST, SGST and IGST. The central taxes like excise duty will be subsumed into CGST and state
taxes like VAT into SGST Conceptually GST is expected to have numerous benefits like
reduction in compliances in the long run since multiple taxes will be replaced with one tax. It is

2. expected to bring down prices and hence the inflation since it will remove the impact of tax on tax
and enable seamless credit.
GST = is a combination of
GST = CGST = (SGST OR IGST)
C – Central GST which is paid to central Govt
S – State GST which is paid to the state Govt
I – IGST Integral – which come when goods & services moves within a states
Example; Product ‘A’ is manufactured in MP and sold in UP, so IGST distributed b/w the states.
In this case SGST will not applicable.
It is expected to generate revenue for the country as the tax base will increase as the GST rate will
be somewhere around 27% with both goods and services covered. It is also expected to make
exports from India competitive and India a preferred destination for foreign investment since GST
is a globally accepted tax.
Tax is the money which is paid to the government it is imposed on your income, business profits,
cost of goods and services and the transaction. So that government can use this money in public
interest and to pay of the national debt.
There are actually two types of taxes
Direct Taxes and Indirect Taxes
 The direct tax, which’s liabilities,
cannot be shifted like,
1. Corporate taxes
2. Income taxes
3. Wealth Taxes
But indirect taxes who’s liabilities can
be shifted to someone else… like
1. Central excise taxes
2. Sales Tax
3. Service Tax
GST is a point of interest is indirect taxes which includes
a) excise duty

3. b) Service Taxes
c) Additional Duty of Custom
d) Value Added Tax
e) Entertainment tax
f) Luxury Taxes etc..
The question is how GST system is different from current system in India
Cheaper than the current system
GST SYSTEM CURRENT SYSTEM
Raw material Manufacturing cost
50 + 50 = 100
10% of his 50 from his profit
Selling price will not increase
The cost of product for distribution will be
100 + 20 = 120
He pay the tax of 2 of his profit
Wholesaler do the same by adding
120+20=140
Manufacturer 50+50=100
Raw material 10% tax
Distributor 110+20=130 (13%)
Wholesaler 143+20=163 (10% tax)
Retailer 179.3+20=199.3 (10% tax)
Consumer 219.23
Retailers add his 140+20=160 and pay the tax of his 10%
So the product is compare the product is 59.23 Rs.
GST has 5 categories in India
o 0% categories which will applies to Foodgranes etc
o 5% categories which will applies mostly and widely used item
o 12% categories normal items
o 18% categories normal items
o 28% categories luxury items

4.  Conclusion
GST is levied on all transactions such as sale, transfer, purchase, barter, lease, or import of
goods and/or services. India will adopt a dual GST model, meaning that taxation is administered
by both the Union and State Governments. Transactions made within a single state will be levied
with Central GST (CGST) by the Central Government and State GST (SGST) by the government
of that state. For inter-state transactions and imported goods or services, an Integrated GST
(IGST) is levied by the Central Government. GST is a consumption based tax, therefore, taxes
are paid to the state which the goods or services are consumed not the state in which they were
produced. IGST complicates tax collection for State Governments by disabling them to collect
the tax owed to them directly from the Central Government. Under the previous system, a state
would have to only deal with a single government in order to collect tax revenue.
 References
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2. "Finance minister Arun Jaitley may hike service tax to 16-18% in Budget", The Times of
India, 30 January 2017
3. "Looking back at GST’s journey: How an idea is now near reality", Indian Express, 31
March 2017
4. "What is GST, how is it different from now: Decoding the indirect tax regime", Business
Standard, 17 April 2017
5. "GST may swallow all taxes but cess", Business Standard, 20 September 2016
6. "On Notes Ban, Firm Warning From West Bengal To Centre: GST Now At Risk",NDTV,
30 November 2016
7. "GST: The illustrative guide to how transactions will take place after tax reform".Money
Control. Retrieved 10 May 2017.
8. "'States on Board, GST Launch from April '16'". newindianexpress.com.
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April 2017.
10. "Power to levy GST - GST India Forum". gstindia.net. Retrieved 2 January 2017.