What Are The Characteristics Of Goods And Service Taxes?
India enacted the Goods and Services Tax (GST) on July 1, 2017. To prevent the indirect tax’s cascading effect, the Goods and Services Tax was implemented. The GST Council was established to determine the Goods and Services Tax rates. The GST Council’s chairman is the union minister of finance. In this blog, we have discussed the characteristics of goods and service tax join GST Training In Chennai offered by FITA Academy.
Characteristics Of Goods And Service Tax
1)Comprehensive Indirect Tax
A complete indirect tax is the GST. Under the previous indirect tax scheme, it absorbed 17 indirect taxes imposed by the Central and State governments. The Goods and Services Tax (GST) has combined multiple taxes into a single, cohesive tax. As a result, the GST has created a single tax system.
In the state where products and services are ultimately consumed, GST is due. It is, therefore, a destination- or consumption-based tax.
3)Same GST Rate Throughout The Country
One Nation, One Tax, One Market is the motto of the GST. The GST regime maintains uniform GST rates across the nation. In the past, the states had varied VAT/Sales Tax rates.
4)Tax On The Supply Of Goods And Services
Besides taxes on the supply of alcoholic spirits for human consumption, GST is a tax on providing commodities and services. Petroleum items are currently exempt from GST. The GST Council has the authority to approve including petroleum products in the GST network. Petroleum goods include motor spirit, high-speed diesel, petroleum crude, natural gas, and fuel for aircraft turbines.
In contrast to the previous idea of taxing the production or sale of products, the word “supply” is employed here. Consequently, branch and stock transfers will likewise be covered by the GST net. The registered person or taxpayer deducts GST from the price that the buyer of goods and services pays.
5)No Tax On Due To Input Tax Credit
The Value Added Tax family includes the Goods and Services Tax. The increased value of the items is subject to GST. Additionally, the Input Tax Credit, or ITC for short, is permitted to prevent the tax cascade effect. Any registered taxable person conducting business wherever in India is eligible to receive a credit for tax on inputs that are allowed for him. This credit will be applied to the individual’s electronic credit ledger in the government’s records. There is no tax on tax as a result.
6)GST Collected Is Payable To The Government
When goods and services are supplied, GST is collected. After deducting the GST paid on purchases of goods and services, the government is entitled to the GST collected on the supply of goods and services.
Thus, the characteristics of GST are Comprehensive indirect tax, Consumption-based tax, The same GST rate throughout the country, Tax on the supply of goods and services, No tax on due to the input tax credit, and GST Collected is payable to the government.