Page 25 - Cafe-Social-September-2019

Café Social

GST “ONE NATION,
Legal
ONE TAX, ONE MARKET.

Before implementation of Goods and Service Tax (GST), Indian taxation
system was a farrago of central, state and local area levies. By subsuming more
than a score of taxes under GST, road to a harmonized system of indirect tax has
been paved making India an economic union

WHAT IS GST?

GST is an Indirect Tax which replaced many Indirect Taxes in India.
The Goods and Service Tax Act was passed in the Parliament on
29th March 2017. The Act came into effect on 1st July 2017.
Goods and Service Tax (GST) is an indirect tax levied on the supply
of goods and services. GST is one indirect tax for the entire country.
So, Goods and Service Tax has replaced many indirect tax laws that
previously existed in India.

Adv Vinay Pitalia
Associate: Singhania & co.
GST Regime
Value Addition: The manufacturer who
Under the GST regime, the tax is levied at every point of sale. CGST makes biscuits buys flour, sugar and other
and SGST is collected on Intra State Sales (sales within the state) material. The value of the inputs increases
whereas IGST is collected on Inter State Sales. when the sugar and flour are mixed and
GST is a comprehensive, multi-stage, destination-based tax that is baked into biscuits. The manufacturer then
levied on every value addition sells the biscuits to the warehousing agent
who packs large quantities of biscuits and
labels it. That is another addition of value
Multi-stage: There are multiple change-of-hands an item goes after which the warehouse sells it to the
through along its supply chain: from manufacture to final sale to the retailer. The retailer packages the biscuits in
consumer. smaller quantities and invests in the
For Example: Purchase of raw materials; Production or marketing of the biscuits thus increasing its
manufacture; Warehousing of finished goods; Sale to wholesaler; value. GST is levied on these value additions
Sale of the product to the retailer and; Sale to the end consumer. GST i.e. the monetary value added at each stage to
is levied on each of these stages which makes it a multi-stage tax. achieve the final sale to the end customer.

edition | September 2019