What is GST, how many are there and what are the benefits of it?
GST acronyms for Goods and Service Tax. GST is a type of tax which charged only whenever we buy any type of products or services. GST was implemented in India on 1st July 2017. GST is a indirect tax which is imposed on us indirectly. Before 2017, there are several taxes such as sales tax, excise tax, service tax etc. But GST included all types of taxes under itself. The main feature of GST(Goods and Service Tax) is that the sales of goods and services applies all over the country on same rate. It means that the rate of GST tax will be same in whole country. Because of the GST, the every consumer of goods and services will have to pay an equal tax on that items there will be no change in the rate of tax paying.
Types of GST:
There basic three types of GST taxes which are as follows:
- Central Goods and Service Tax: In Central Goods and Service Tax, the taxes are collect with in the state only which is implemented by Central Government. In this GST, transaction will be Intra-state.
- State Goods and Service Tax: In State Goods and Service Tax, the taxes are collect with in the state only which is implemented by State Government. In this GST, transaction will be Intra-state.
- Integrated Goods and Service Tax: In Integrated Goods and Service Tax, the taxes are collect from one state to another state which is implemented by State Government.
There are some items which have not GST such as Food grains, good, milk, egg, curd, uncovered cheese, fresh sahad, fresh vegetable, flour, gram flour, maida, vegetable oil, prasad, salt, betel leaves, sugarcane. Rates of GST on different items:
- 5% GST will be attract on Sugar, Tea, Coffee, Edible Oil, Coal, Skimmed milk, powder, Food made from milk, Condensed milk, Packed cheese, Newsprint, Umbrella, PDS, Kerosene, LPG, Beet, Graphite, Chalk, Barati, Phosphate, calcium.
- 12% GST will be attract on Butter, ghee, mobiles, almonds, cashew, fruit juice, packed coconut, water, agarbati, bio-gas, hydrogen peroxide, iodine.
- 18% GST will be attract on Hair oil, soap, toothpaste, capital goods, pasta, maca, cakes, jams, soups, ice cream, toilets, facial tissue, iron, steel, fountain pen, fluorine, chlorine, wax.
- 28% GST will be attract on chiwing gum, perfume, custard powder,sampoo, make up, bike, car, hair dyes, hair cream, firecrackers, Car, cement.
Benefits of GST:
There are many advantages of GST which are as follows:
- The tax structure of GST will be only by which fraud of tax evasion will be reduced and income of government will be increased through GST.
- After implementation of GST the tax rate will be same for every one.
- Tax structure will be transparent because of GST.
- Tax system will be improve through GST and GST is easy to implement.
- The turn over of any business was more than 5 lakhs before GST but after implementation of GST now it has been reduced to 20 lakhs which is beneficial for small business traders and small service providers.