GST- WHAT IT IS?
Goods and Service Tax (GST) has come into the effect from 1st July 2017. It was the most awaited Tax reform. It simplified the taxation. Previously the taxes were collected at various levels. GST is a comprehensive, multi-stage, destination based tax which will be levied on every value addition. Old Tax System 1. Manufacturer buying Raw Material - VAT (Rate may differ) 2. Wholesaler buying from Manufacturer - VAT + OTHER TAXES(Rate may differ) 3. Retailer buying from Wholesaler- VAT + OTHER TAXES (Rate may differ) 4. Customer buying from Retailer- VAT (Rate may differ) GST system 1. Manufacturer buying Raw Material - GST (same Rate) 2. Wholesaler buying from Manufacturer - GST (same Rate) 3. Retailer buying from Wholesaler- GST (same Rate) 4. Customer buying from Retailer- GST (same Rate) Why same rate? Because GST rate is fixed for everything. What is multi-stage? Multi means many. In the above case, it will be called 4 stages. What is valu...