Skip to main content

How GST works in India? | Indirect tax structures | Certicom

GST is a Destination-based tax. GST follows a Multi-Stage collection mechanism. The Goods and Services Tax (GST) will be collected at each stage (from the product manufacturing stage to the delivery to the final consumer) and the tax credit paid in the previous stage is available as a set-off at the next stage of the transaction. This helps eliminate the system of “Indirect tax on taxes”.
Indirect tax structures in India can be clearly understood from the following chart:




GST Work in India


Now GST (Goods and Services Tax) replaces all of these indirect taxes collected by the Central and State Governments.

When the Goods and Services Tax is applied, there will be 3 types of applicable Goods and Services Taxes, namely CGST, SGST & IGST.

GST Model

CGST – Central Goods and Services Tax: Revenue will be collected by the central government

SGST – State Goods and Services Tax:  Revenue will be collected by the state government for intra-country sales (that is, sales in certain states in India)

IGST – Integrated Goods and Services Tax: Revenue will be collected by the central government for sales between countries (that is, sales between various states in India)

The CGST, SGST & IGST can be understood better than the following diagram:









GST Types
Transaction of goods New Regime Old Regime Points to Note
Sale within the particular state CGST + SGST VAT + Central Excise/ Service tax Revenue will now be shared between the Centre and the State
Sale to another State IGST Central Sales Tax + Excise/ Service Tax There will only be one type of tax (central) now in case of inter-state sales.

Comments

Post a Comment

Popular posts from this blog

Due Date For Filing ITR | Audit Reports Extended By 15 Days | Certicom

Due Date For Filing Income Tax Return, Audit Reports Extended By 15 Days The taxman last month announced the extension of the maturity date of September 30 by a similar 15 days.  The Government on Monday extended the due date for submission of income tax returns (ITR) and audit reports. The Direct Tax Center Board, the top policy-making body of the Income Tax Department, said the due date for filing  income tax returns  and the audit report for Assessments 2018-19 (2017-18 financial year) is October 31, 2018 for certain. taxpayer category. Monday’s step marks the second extension given by the  Direct Tax  Center Council to assessors whose bookkeeping must be audited. The move comes after the tax officer considers representation from stakeholders, he said in a statement. The taxman last month announced the extension of the maturity date on September 30 by the same 15 days, until  October 15, 2018 . Submission of income tax returns by paid taxpayers...
1 comment
Read more

What is GST in India? Goods & Services Tax Bill Explained | Certicom

GST is an Indirect Tax that has replaced many Indirect Taxes in India. The Goods and Services Tax Law was passed in Parliament on March 29, 2017. This Act came into effect on July 1, 2017; The Goods & Services Tax Law in India is a comprehensive , multi-stage tax based on the objectives imposed on each value addition . What is GST? “GST (Goods and Services Tax) is India’s largest indirect tax reform. GST is a single tax on the supply of goods and services. This is a destination-based tax. GST has included taxes such as Central Excise Law, Service Tax Law, VAT, Entry Tax, Octroi, etc. GST is one of the largest indirect tax reforms in the country. GST is expected to unite the country’s economy and increase the country’s economic growth as a whole. GST is one of the indirect taxes for all countries . So, before the Goods and Services Tax, the tax collection pattern is as follows: Multi-stage There are several changes of goods that enter through its supply...
Post a Comment
Read more

KYC non-compliance

Govt deactivates ID numbers of 2.1 million directors The government began the process of deactivating the identification numbers of almost 2.1 million directors of companies that did not comply with KYC standards, according to a senior official. The director’s identification numbers (DIN), a unique number assigned to people who are eligible to be directors at meetings of registered companies, are being deactivated. They will be reactivated after paying a fee of 5,000 rupees along with the required form and the affected people could also face a lawsuit. The latest movement of the  Ministry of Corporate Affairs  also comes at a time when the government has intensified the crackdown on the front companies, which are suspected conduits for illicit cash flows. In June, the ministry decided to carry out the KYC process (Know Your Client) for all directors, including those who have been disqualified. The last date to comply with the new rules by sending the form ‘ DIR-3 KY...
Post a Comment
Read more