goods and service tax GST tax taxation goods and services overview introduction history implementation journey process requirement slab rates Sahab sums taxes Central Government State Government advantages disadvantages problems

2. The goods and services tax (GST) is a value-
added tax levied on most goods and services
sold for domestic consumption. The GST is paid
by consumers, but it is remitted to the
government by the businesses selling the goods
and services.
• France was the first country to implement the GST in
1954; since then, an estimated 160 countries have
adopted this tax system in some form or another. Some
of the countries with a GST include Canada, Vietnam,
Australia, Singapore, United Kingdom, Monaco, Spain,
Italy, Nigeria, Brazil, South Korea, and India.
• The different tax slab are being made keeping in mind
the nature of different types of goods and services. In
order to calculate GST, one has first find these codes:
1. HSN- Harmonized System of Nomencalture
2. SAC- Services Accounting Codes
Once the codes are identified, the applicability of CGST,
SGST and IGST is to determined.
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3. The genesis of the introduction of GST in the country was laid down in the historic Budget Speech of
28th February 2006, wherein the then Finance Minister laid down 1st April, 2010 as the date for the
introduction of GST in the country. Thereafter, there has been a constant endeavor for the introduction of the
GST in the country whose culmination has been the introduction of the Constitution (122nd Amendment) Bill
in December, 2014.
 President Assent for enactment of Bill
 Formation of GSTC
 Approval of Recommendations by CG and SG
 Drafting of Central and State GST Acts and Rules
 Effective Date defined by GSTC
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4. India has, since launching the
GST on July 1, 2017,
implemented the following tax
rates:
•A 0% tax rate applied to certain
foods, books, newspapers,
homespun cotton cloth, and
hotel services.
•A rate of 0.25% applied to cut
and semi-polished stones.
•A 5% tax on household
necessities such as sugar,
spices, tea, and coffee.
•A 12% tax on computers and
processed food.
•An 18% tax on hair oil,
toothpaste, soap, and industrial
intermediaries.
•The final bracket, taxing goods
at 28%, applies to luxury
products, including refrigerators,
ceramic tiles, cigarettes, cars,
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5. Taxes Subsumed In GST
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 GST replaced the following taxes currently levied and collected by the Centre:-
a) Central Excise Duty
b) Duties of Excise (Medicinal and Toilet Preparations)
c) Additional Duties of Excise (Goods of Special Importance)
d) Additional Duties of Excise (Textiles and Textile Products)
e) Additional Duties of Customs (commonly known as CVD)
f) Special Additional Duty of Customs(SAD)
g) Service Tax
h) Cesses and surcharge in so far as they relate to supply of goods and services.
 State taxes that are subsumed within the GST are:-
a) State VAT
b) Central Sates Tax
c) Purchase Tax
d) Luxury Tax
e) Entry Tax (All forms)
f) Entertainment Tax and Amusement Tax (except those levied by the local bodies)
g) Taxes on advertisements
h) Taxes on lotteries, betting and gambling
i) State cesses and surcharges in so far as they relate to supply of goods and services.

6.  Simpler tax regime with fewer exemptions
 Final price of goods is expected to be transparent due to seamless flow of input tax credit between
the manufacturer, retailer and service supplier
 Reduction in prices of commodities and goods in long run due to reduction in cascading impact of
taxation
 Expansion of the tax base as they will be able to tax the entire supply chain from manufacturing to
retail
 Relatively large segment of small retailers will be either exempted from tax or will suffer very low
tax rates under a compounding scheme - purchases from such entities will cost less for the
consumers
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7.  GST is a totally IT-driven law. While the idea is novel, the flip side is that all states in India aren’t equipped
with the necessary infrastructure to implement this system to its full extent.
 Companies who operate their businesses in multiple states, have to register in all those states. This adds an extra
level of complexity that did not exist earlier.
 The tax officers and other related officials need extensive and exhaustive training to implement and monitor the
new rules in an effective manner.
 There is a distinct possibility that some items will cost more after GST implementation. Items of expenditure
like insurance renewal premium, healthcare, courier services, DTH services will become costlier – items that
millions of us use every day.
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