Goods and Service Tax is the full form of GST. GST is the only indirect tax levied by the Government of India. It is one of the most significant tax reforms in the country. The bill is designed to unify all indirect taxes including VAT, Central Excise, Luxury Tax, Service Tax Act, Entertainment Tax and Entry Tax.
To put it plainly, all domestically produced products and services associated with imported products would provide standard indirect tax through GST which means GST. A GST Bill was passed in Parliament on 29 March 2017. The tax also came into effect on 1 July 2017. GST was enacted to improve national economic growth and make tax treatment more efficient.
Types of GST
There are different types of GST which are-
- Central Goods and Services Tax (CGST)
CGST is a tax levied on domestic services and distribution of products. These taxes include Central Excise Duty, Service Tax, Additional Excise Duty, CVD (Compensatory Tax) and Excise Duty under Medical and Toilet Preparation Act.
- Integrated Goods and Services Tax (IGST)
IGST applies to taxes paid on international supplies of services and goods. For example, products traded between two states, including Karnataka and West Bengal, are subject to IGST. In addition, IGST is levied on both export and import of services and products from India.
- State Goods and Services Tax (SGST)
SGST is a tax levied on goods and services provided within a given state. The law covers various state taxes like luxury tax, state income tax, entry tax, entertainment tax and so on.
Commodities not subject to GST
List of the commodities does not fall under GST is mentioned below:
- Live animals
- Meat
- Fillets & Fish
- Trees & live plants
- Meat
- Alcohol
- Fertilizers
- Coffee & Teas
- Spices
- Dry fruits
- Edible grains
- Vegetables
- Pharmaceutical & Drugs
- Claws & hooves
- Musical & Industrial instruments