the Parliament on 29th March . The Act came into effect on 1st July ; Goods & Services Tax in India is a comprehensive , multi- stage , destination-based tax that is levied on every value addition . In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. This law has replaced many indirect tax laws that previously existed in India.
GST is one indirect tax for the entire country . Under the GST regime, the tax will be levied at the final point of sale. In case of intra-state sales, Central GST and State GST will be charged. Inter-state sales will be chargeable to Integrated GST.
- - Fiscal Economics Destination Based Consider goods manufactured in Tamil Nadu and are sold to the final Single Tax to replace multiple levies, right from manufacturer / supplier to consumer consumer in Karnataka. Since Goods & Service Tax is levied at the point of consumption, in this case, Karnataka, the entire tax revenue will go to Karnataka and not Tamil Nadu. Components of GST The component of GST are of types. They are: CGST, SGST & IGST.
CGST: Collected by the Central Government on an intra-state sale (Eg: Within state/ union territory) SGST: Collected by the State Government on an intra-state sale (Eg: Within state/ union territory) IGST: Collected by the Central Government for inter-state sale (Eg: Maharashtra to Tamil Nadu) In most cases, the tax structure under the new regime will be as follows: Transaction New Regime Old Regime Sale within the State CGST + SGST VAT + Central Excise/Service tax Revenue will be shared equally between the Centre and the State Sale to another State IGST Central Sales Tax + Excise/Service Tax There will only be one type of tax (central) in case of inter-state sales. The Center will then share the IGST revenue based on the destination of goods. Nature of Sales tax, VAT and GST . Sales tax was multipoint tax with cascading effect.
. VAT was multipoint