Today let us talk about what is GST?
GST is the biggest tax reform that will revolutionise the indirect tax space by eliminating the cascading effect of taxes, replacing multiple indirect taxes like excise, service tax, VAT and increasing the tax base.
However, Indian GST isn’t really one tax but five taxes.
First is the CGST, Second is the SGST, Third is the IGST or Integrated GST, Fourth is the UTGST and Fifth is Compensation Cess which is applicable on specified goods
Let us understand the 5 tax slabs prescribed under GST
In the current regime of Indirect taxes, no tax credit is given for the goods purchased outside the state and also the credit of Excise can not be claimed by dealer unless he re-manufacturing the product and pays excise duty. But with introduction of GST, Input Tax Credit can be availed for both Excise duty as well as for interstate purchase. You can also claim ITC on services against Goods and Vise versa.
Hence due to avoidance of double taxation the tax burden on consumers is way less.
We hope you found this useful. For more information on such topics visit hrblock.in