What are goods and services tax in India?

In India GST was implemented on 1st July 2017. Goods and Services is tax applicable at every point of sale. GST was introduced to replace various indirect tax. Integrated GST is applicable on the inter-sale sales like state GST, Intra-state sales and central GST. Goods and Services is multi-stage, comprehensive and destination based tax. Goods and Services of the different rates such as 5%, 12%, 18% and 28%.

GST is value added tax which is levied on every stage of the value addition. Get help from the Profesional Utilities to solve any problem related to the GST.

Table Of Content

What is Goods and Serviecs Tax?

GST is the tax implicable which is applicable at each stage of the supply chain on the consumption of the goods and services from manufacturer to the consumer.

Journey of GST in India

Concept of the goods ans services was introduced in the 2000 by the Prime Minister. Committee headed by Asim Dasgupta was formed to outline new indirect tax law and its implementation took 17 years. Through those years bill go through various introduction, amendments and rescheduling.
In 2002 to 2004 the kelkar task force made as report the need for the implementation of this law and in India indirect tax system can be improve. In 2003 comprehensive good and service tax is suggested.
In 2006 - Introduction of the Goods and Services tax was scheduled by the finance minister of India on 1st april’ 2010.
In 2007 On request, the EC (empowered committee) of state FMs began work on the GST roadmap. The Joint Working Group sent its report to the EC on December 19th, further in November. Rate of CST was reduced from 4% to 3%.
In 2008 empowered committee finalised the GST dual structure for levy and seperate legislation.
In 2009 The empowered committee or EC which was consist of the working group of the principal secretaries and commission of trade taxes all over the UT/State to give recommendation -

The State Bank of India or another Nationalised bank(s) must be used for interstate financial transactions.
Interstate service rules
In exempted list certain services and commodities are included.
In 2010 speech given by the Finance Minister about the GST to be introduced in april 2011 was given.
In 2011 In constitution 115 amendement bill was introduced in lok sabha it was decided how GST on Goods and Services except specified goods. Bill propose making of the Goods and Services Tax Council and Goods and Service Tax Dispute settlement authority.
In 2012 Standing Committee initiated the discussion about the tax. But hols up due to lack of the clarity.
In 2013, Standing committee gives report on the GST. Empowerment committee deny to include petroleum products.
In 2014, In loksabha 122 amendment bill is presented for the levy of the GST.
In 2015, Bill got hold in the Rajya Sabha, after passing from the Lok Sabha.
In 2016, the launch of the Goods and Services Tax Network (GSTN). The law's revised draught was approved by the President of India and by both Houses of Parliament.
In 2017, GST bill is passed by the Lok sabha and Rajya Sabha with approval of the Cabinet on Supplementary bill. On 1 july 2017 The Goods and Services Tax Law was implemented.

Component of GST

There are three components of the Goods and Services Tax on the basis of the state, central and integrated levy as mentioned below -

State Goods and Services Tax - SGST is the tax collected on sale of the goods and services by the state government within particular state.
Central Goods and Services Tax - CGST is the tax collected by the central government on intra- state sales.
Integrated Goods and Services Tax - IGST is collected on the sales affected inter-state by the central government.

Objective of GST

GST was introduced for the replace fragmented and complex tax structure. There are various objective for which GST is introduced are -

To encourage market competition and boost demand.
'One Nation, One Tax' ideology is achieved.
Tax invasion is curbed
Cascading effect of taxes is eliminated
Logistics and distribution system are improved
Doing business is eased by online procedure.
Consumption is increased and competitive pricing is promoted.

Conclusion

GST is a single domestic tax law levied for the entire country. This was introduced to reform the taxation system and bring many benefits to the taxpayer as well as the government. Applicability of GST has the primary goal of reducing tax evasion, simplifying tax systems, and establishing a more transparent and efficient mechanism of taxation, making it easier for businesses to comply with related obligations such as seeking a Consultant for Professional Tax Registration.

Why Professional Utilities?

Professional Utilities simplify registrations, licenses, and compliances for your business. With experienced guidance and nationwide support, we help you complete every requirement efficiently and effectively.

Complete Corporate Solutions

PAN India
Assistance

Free Expert
Guidance

Google-Verified
Team

Dedicated Support

Transparent Refund
Assurance

Frequently Asked Questions

Who has introduced goods and service tax?

The Kelkar Task Force on Indirect Taxes first suggested the notion of a national GST in India in 2000.

What does goods and services tax means in India?

goods and services tax means every value addition in India is subject to the comprehensive, multi-stage Goods and Services Tax Law, which is dependent on destination. A single domestic indirect tax law, known as GST, applies to the entire nation. The tax is collected at every point of sale under the GST system.

Is service provided to a foreign client taxable in India?

Taxability of services to foreign clients depends on the place of supply, recipient location, and payment in foreign currency. If conditions for export of services are met, such services may be treated as zero-rated under GST.

How can businesses optimize Input Tax Credit under GST in India?

Input Tax Credit (ITC) allows businesses to reduce their GST liability by claiming credit for taxes paid on inward supplies of goods and services used in the course of business. Proper management and documentation of ITC can significantly improve cash flow and reduce tax outgo. For detailed guidance, see Optimising input tax credit under GST.