GST#1 - Introduction to Indian GST - What Is GST?
GST means Goods and Services Tax. This law is Levied on the supply of Goods and Services. It extends to the whole of India, except Jammu and Kashmir. It comes in to force from 1st July 2017. It is possible that different provisions of the act may be made applicable from different dates to ensure that there is no simultaneous operation.
GST is said to be a destination-based tax. It means that tax will finally occur to the state where final consumption takes place. Final consumption is called the place of supply of goods or services.
We will learn what is the exact meaning of 'Goods' and 'Services' in other blogs. We will also learn the meaning of 'Supply' and 'Place of supply' in a separate blog. At present, we can only note that it is not the 'sale' on which GST is charged, but it is changed on 'supply' of goods or services. Therefore, even when goods are supplied without consideration, GST may be chargeable in certain cases.
Although the act is common for goods and services, there are various provisions which are different for goods and for services.
Now you may say, Whether GST will be levied on all the goods and services? The answer is no.
1. There are some goods on which tax is not leviable. e.g. Alcoholic liquor for human consumption
2. There are some goods on which tax is not available for now but in future, It may be levied on the basis of recommendations made by GST Council.
3. There are some goods which are exempt from taxation. Such Exemptions are made considering some social aspect. e.g. services of a health clinic are exempt from taxation. When such Exemption is withdrawn by any notification in the future, a general rate of GST or the rate specified for those goods or services will be applicable
4. There are certain goods which are not appearing in the list of exempt goods but appear in the taxable goods or services but the rate mentioned for such goods is NIL.
5. The final effect of all the four mentioned above is the same, That there is no GST charged on the same but there are various other technical implications.
6. It may be noted that existing VAT and Excise duty will be continued to be charged on items mentioned in Sr.No. 1 and 2 above.
Understanding Important Terms of GST
GST is said to be a destination-based tax. It means that tax will finally occur to the state where final consumption takes place. Final consumption is called the place of supply of goods or services.
We will learn what is the exact meaning of 'Goods' and 'Services' in other blogs. We will also learn the meaning of 'Supply' and 'Place of supply' in a separate blog. At present, we can only note that it is not the 'sale' on which GST is charged, but it is changed on 'supply' of goods or services. Therefore, even when goods are supplied without consideration, GST may be chargeable in certain cases.
Although the act is common for goods and services, there are various provisions which are different for goods and for services.
Now you may say, Whether GST will be levied on all the goods and services? The answer is no.
1. There are some goods on which tax is not leviable. e.g. Alcoholic liquor for human consumption
2. There are some goods on which tax is not available for now but in future, It may be levied on the basis of recommendations made by GST Council.
3. There are some goods which are exempt from taxation. Such Exemptions are made considering some social aspect. e.g. services of a health clinic are exempt from taxation. When such Exemption is withdrawn by any notification in the future, a general rate of GST or the rate specified for those goods or services will be applicable
4. There are certain goods which are not appearing in the list of exempt goods but appear in the taxable goods or services but the rate mentioned for such goods is NIL.
5. The final effect of all the four mentioned above is the same, That there is no GST charged on the same but there are various other technical implications.
6. It may be noted that existing VAT and Excise duty will be continued to be charged on items mentioned in Sr.No. 1 and 2 above.
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Difference Between CGST, SGST/UGST and IGSTUnderstanding Important Terms of GST
