Goods and Services Tax or GST is an indirect tax that has subsumed more than a dozen of state levies. GST replaced State taxes such as VAT, Central Sales Tax, Purchase Tax, Entry Tax, Entertainment Tax, taxes on advertisements, lotteries, betting and gambling, and state cesses and surcharges.
Hailed as the biggest tax reform since Independence, GST is comprised in three parts Central GST (CGST), State GST (SGST) and Integrated GST (IGST).
CGST: Central Goods and Services Tax (CGST) is levied on intrastate supplies of both goods and services by the Central Government and is governed by the CGST Act. SGST, governed by the State Government, will also be levied on the same intrastate supply.
SGST: The State Goods and Services Tax (SGST) is a tax charged on intra-state supplies of both goods and services by the state government and is governed by the SGST Act. An important point to note is that any tax liability obtained under SGST can be set off against SGST or IGST input tax credit only.
IGST: The Integrated Goods and Services Tax (IGST) is applicable on all inter-state supplies of goods and/or services and will be governed by the IGST Act. The tax is levied on any supply of goods and/or services in both cases of import into India and export from India. Under IGST, exports would be zero-rated and the tax will be shared between the Central and State Government.
With uniform prices throughout the country, GST is a simpler tax regime which brings transparency in the system.
The new technologically driven tax structure has all aspects like registration, returns filing, application for refund and response that needs to be completed online via the GST portal.