The Government of India introduced the Goods and Service Tax (GST) in India on 1st July 2017 to replace many indirect taxes like the VAT, Service tax, etc. GST (Goods and Service Tax) in India is issued on the supply of services as well as goods. GST is regarded as a single most domestic indirect tax law for the whole country. In the year 2017, the GST Bill was passed in the Rajya Sabha and in the Lok Sabha and on 1st July 2017, the Goods and Service Tax (GST) in India came into force.
There are three taxes that are applicable under the GST and they are as follows:
a) CGST: CGST is the tax collected by the Central Government of India.
b) SGST: SGST is the tax that is collected by the State Government of India.
c) IGST: This is the tax that is collected by the Central Government of India for an inter- state sale.
The difference between the Current Taxation & the New GST in India are discussed below:
i) Under the Current Taxation system, tax will be issued at the place where goods are sold and manufactured. Whereas, under the new GST, tax is issued at the place of consumption.
ii) Under the Current Taxation system, the centre charges service tax on a list of services under the Finance Act. But under the new GST, the State GST includes service tax depending upon rules and regulation relation to place of supply.
iii) Under the Current Taxation system, the centre charges tax on imports under a separate tax but on the other hand, under the new GST there are no changes.
iv) Under the Current Taxation system, entry tax is charged by certain states for inter-state transfers. Besides, under the new GST, entry tax is not applicable, but an additional 1% is issued as tax on inter-state supply of some commodities.
v) Under the Current Taxation system,the tax on Export of Commodities and Service is released but under the new GST there is no change.
vi) Under the Current Taxation system, the registration is decentralised both under the Central and State authorities and under the New GST, there will be uniform e-registration done depending on the PAN of the entity.
Some of the impacts of New GST in India are as follows:
a) With the introduction of New GST in India it helps in the growth of production because the taxes have gone down and the consumer has to pay lesser taxes.
b) New GST has simplified the taxation system of the country.
c) New GST has enhanced Pan India operations.
d) It helps in the increase of exports.
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