The full form of GST is Goods and Service Tax; there is no as such meaning of GST as it is an indirect tax. Let us understand what mean by GST and why it has been implemented in India along with other features.
GST is a consumption-based tax that has to be paid by every consumer in the supply chain. GST was passed by the government in the Parliament on 29th March 2017. Moreover, under GST the supplier can claim Input Tax Credit (ITC) to set off the output liability.
One Nation One Tax was the main pillar behind the introduction of GST in India as before the introduction of GST there were different types of indirect taxes. Some of the common indirect taxes before GST regime were:
These taxes were levied and collected by different authorities and due to this, there was a tax on tax before GST. However, after the introduction of GST, the image of indirect tax has been moved upside down.
Under the GST regime, the indirect tax structure has been simplified as now the supplier and consumer has to adhere to only one indirect tax. In addition to this, the government is now having greater control over the indirect tax structure in India as most of the other indirect tax department has been streamlined into a single authority.
Every person consuming the good is liable to pay GST until or unless it is not exempted goods. Howsoever, it shall be noted that the registered supplier has to collect GST from the end consumer and remit the same to the government through filing GST Return on or before 20th of every subsequent month.
Under the GST system, there are 3 taxes applicable and they are:
Currently, there are four slabs under GST and they are:
0%, 5%, 12%, 18% and 28%
Let us understand this with an example:
The cost of frozen peas is 100 and the applicable GST rate on the frozen item is 5%. Then the GST on the same will be 100x5÷100 i.e. 5 INR. This is how you can calculate GST.
However, you can use our online GST calculator for the same, which is easy to use. Hope, now you understand GST meaning and its worth.