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Do You Know GST Well?

Dec 04, 2021 Alankit

Came into effect on 1st July 2017, by amending the Constitution of India, Goods and Services Tax (GST) was hailed as a significant tax reform of Independent India. This is helping streamline the taxation process and reshaping India’s economy, making India a major economic powerhouse of the world. It is the single indirect tax law for the entire country.

In another way, GST is levied on the supply of goods and services. The GST law in India is a comprehensive and multi-stage tax that is levied on every value addition.

The journey of GST in India began 21 years back in 2000 when a committee was set up to draft the law. It took 17 years for the law to come into existence with the approval of the Lok Sabha and Rajya Sabha. During its course, certain objectives were introduced such as:

  • To achieve the ideology of One Nation, One Tax
  • To subsume a majority of the Indirect Taxes in India
  • To eliminate the cascading effects of taxes
  • To curb tax evasion
  • To curb tax evasion
  • To increase the taxpayer base
  • Online procedures for Ease of Doing Business
  • Improves logistics and distribution system
  • To promote competitive pricing and increase consumption

Before GST was introduced in 2017, we had multiple taxes levied in the country. There were various reasons to implement GST in the country:

  • Different State Governments followed a different set of rules and regulations related to taxation.
  • The Central Government levied Central State Tax on an inter-state transaction.

There was a lack of uniformity in the tax structure, due to which the internal trade within the country suffered immensely. Intersecting of taxes at the State and Central level or cascading impact of tax regime was undermining the internal trade and hence, GST was introduced.

GST was introduced in four different verticals:

  • Integrated Goods and Services Tax (IGST):
    Under GST, this tax is applied to the supply of goods and/or services between two states as well as on imports and exports. The IGST is governed by the IGST Act 2017. According to IGST; the body responsible for collecting the taxes is the Central Government.
  • State Goods and Services Tax (SGST):
    This tax regulation is applicable within the same State transactions. The revenue earned through SGST is solely claimed by the respective State Governments.
  • Central Goods and Services Tax (CGST):
    Same as the State GST, the Central Goods, and Services Tax is applicable on intrastate transactions. The revenue earned from CGST is collected by the Central Government.
  • Union Territory Goods and Services Tax (UTGST):
    This tax is the counterpart of the State Goods and Services Tax (SGST) which is levied on the supply of goods and/or services in the Union Territories of India. The UTGST applies to the supply of goods and services in Andaman and Nicobar Islands, Daman Diu, Dadra and Nagar Haveli, and Lakshadweep. The revenue earned from UTGST is collected by the Union Territory Government. It is a replacement for the SGST in Union Territories. Thus, the UTGST will be levied in addition to the CGST in Union Territories.

Alankit offersGST consulting services to the taxpayers for complying with the Goods and Services Tax (GST) rules, which is making the GST rollout easy yet convenient and to avail the services.

Know More : GST The Realm of Taxation

Types of GST and everything you need to know about GST

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