Introduction to GST
GST stands for Goods and Services Tax, which is a value-added tax levied on the supply of goods and services in India. It is an indirect tax that has replaced several other indirect taxes like central excise duty, service tax, VAT, and others. GST is a comprehensive and uniform tax that has been implemented in India to streamline the taxation process and make it simpler and more transparent.
GST is governed by the GST Council, which is chaired by the Union Finance Minister and includes the Finance Ministers of all the states and Union Territories in India. The GST Council decides on the GST rates, exemptions, and other related matters.
Under GST, there are four tax slabs – 5%, 12%, 18%, and 28%, depending on the type of goods and services. Some items are exempt from GST, while others attract a special rate of 0.25% or 3%.
GST has several advantages for businesses, such as eliminating the cascading effect of taxes, reducing tax evasion, and increasing compliance. It also makes it easier for businesses to do business across states and reduces the compliance burden for small businesses.
Overall, GST is a significant reform in the Indian tax system, aimed at creating a single market for goods and services, reducing the burden of multiple taxes, and boosting economic growth.