The Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. Implemented on July 1, 2017, it replaced multiple cascading taxes levied by the central and state governments, creating a unified national market.
What is GST?
GST is a destination-based, multi-stage tax that is levied on every value addition. It follows a dual model with both Central GST (CGST) and State GST (SGST) being levied on intra-state supplies, while Integrated GST (IGST) is levied on inter-state supplies.
GST Structure
The GST Council has categorized goods and services into five primary tax slabs: 0%, 5%, 12%, 18%, and 28%. Some luxury and sin goods attract additional cess. Essential items like fresh food grains are exempt, while common use items fall in lower slabs, and luxury items in higher slabs.
Key Benefits of GST
- Elimination of cascading effect: Input tax credit prevents tax on tax
- Simplified compliance: Single tax return instead of multiple filings
- Uniform tax structure: Common rates across the country
- Improved competitiveness: Reduced overall tax burden on products
- Boost to 'Make in India': Improved logistics and reduced costs
GST Registration
Businesses with an annual turnover exceeding ₹40 lakh (₹20 lakh for special category states) must register for GST. Registration can be completed online through the GST portal, and once registered, businesses receive a unique 15-digit GST Identification Number (GSTIN).
GST Returns
Registered taxpayers must file various returns including GSTR-1 for outward supplies, GSTR-3B for summary returns, and annual returns. The introduction of the e-invoicing system has further streamlined the compliance process and reduced tax evasion.
GST has transformed India's indirect taxation system, making it more transparent and efficient while promoting economic growth through a simplified tax structure.