GST Full Form

What is the full form of GST?

GST stands for Goods and Services Tax, and in other countries, it is also known as the value-added tax. It is the value-added tax (indirect tax) levied on goods and services that produce, sold, and consumed within a domestic territory and this GST will replace all the taxes imposed by central and state governments respectively.

This Story also Contains

1. What is the full form of GST?
2. What is GST?
3. Types of GST
4. Imbibed taxes of central and state government in GST
5. Goods and Services out of GST
6. Major benefits of GST

What is GST?

It is a destination-based tax that is imposed on consumers but remitted from the producers by the government. it is imposed on the value added during the manufacturing, not on the total value of the product at each stage of manufacturing. It is based on the theory of one nation one tax where the whole market is unified and the same product will be sold at the same price everywhere which also reduces corruption and enables transparency in the market for the benefit of the consumers.

Types of GST

CGST - Central Goods and Services Tax : The CGST is a tax imposed on the distribution of goods and services within a state. The Central Excise Duty, Services Tax, Additional Excise Duty, CVD (Countervailing Duty), and the Excise Duty on the Medical & Toiletries Preparation Act are among these taxes.

Integrated Goods and Services Tax (IGST) - The taxes paid for the worldwide delivery of services and goods are subject to IGST. For instance, if the goods are traded between Karnataka and West Bengal as well as two other states, the IGST will be applicable. In addition, IGST is levied on both imports and exports of goods and services from India.

State Goods and Services Tax (SGST) - The tax imposed on products and services delivered inside a state's borders is known as the SGST. The act unifies the different state taxes, including the luxury tax, state income tax, entrance tax, entertainment tax, and others.

Imbibed taxes of central and state government in GST

Taxes of state government:

State sales tax, Entertainment tax, Octroi duty, Luxury tax, Gambling, lottery tax, etc

Taxes of the central government:

Service tax, Central excise duty, Additional custom duty, etc

Goods and Services out of GST

Electricity, Alcohol, Petroleum-based products like natural gas, diesel, Tobacco products, etc are kept out of the ambit of GST, and state and central governments still have the right to impose a tax on such products and services.

Major benefits of GST

It helps in creating a common market for the whole country and avoids tax evasion and checks on the defaulters for promoting unfair trade practices in the country. It helps cascade the effect of the indirect tax, allows a set off the before taxes in the form of the input tax credit, and includes only the tax on value-added in a supply chain. It also helps in reducing the burden on taxpayers by turning all indirect taxes into a single transactional tax and also by reducing the cost of administration on prior taxes and eases the work of government.

With GST the ease of paying and filing for input tax credits is also committed and with the online mode, it becomes easy for the common businessman to make use of it and perform their duty toward the nation. The tax base in the country also widens with the application of GST because it includes all the registered businesses without any limit of turnovers to have GST and paid tax on their respective goods and services.

It also helps consumers that they need to pay the same price for products purchased anywhere and also reduces the price of the product in the long run by eliminating the cascading effect. It also raises the government revenue and with this expenditure on social assets will also increase.