Everything you Should Know About GST
By Team Legistify / 2017-07-01
GST aims to stitch together a common market by dismantling fiscal barriers between states. It is a single national uniform tax levied across the country on all goods and services. It has been implemented from July 1, 2017, What the GST has done is it has subsumes all local and central indirect taxes (except customs duty). Hence GST has empowered states to collect service taxes.

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GST aims to stitch together a common market by dismantling fiscal barriers between states. It is a single national uniform tax levied across the country on all goods and services. It has been implemented from July 1, 2017,

What the GST has done is it has subsumes all local and central indirect taxes (except customs duty). Hence GST has empowered states to collect service taxes.

Picture Courtesy- digitallearning.com

Illustration- Let us assume that the GST is set at 20%. Suppose that the manufacturing cost of a Product A is 100 and assuming a GST of 20% the total amount is Rs. 120. The next step of taxation would be when the Product is sold to consumers, let’s say at a price of 150. So the GST will charge another 20% on just the difference of Rs. 150 and Rs. 120 i.e. only 20% on Rs. 30 which is equal to Rs. 6. So the final price is Rs. 150 + Rs. 6. Unlike the case of petrol pricing there is no tax on a tax now. This eliminates the cascading effect of taxes which is very prevalent in our economy and has been simplified to an elemental level in the example.

GST aims to stitch together a common market by dismantling fiscal barriers between states. It is a single national uniform tax levied across the country on all goods and services. It has been implemented from July 1, 2017, What the GST has done is it has subsumes all local and central indirect taxes (except customs duty). Hence GST has empowered states to collect service taxes.

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


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