Consumption and indirect tax revenues have both risen since the implementation of GST. Prices in India were higher than in global markets because of the cascading effect of taxes under the previous regime. Some states had lower VAT rates than others, causing an imbalance of purchases in those states. The uniformity of GST rates across India and the rest of the world has resulted in lower prices for consumers across the country and around the world. This has resulted in an increase in sales and a boost in revenue, which is another important goal that has been met.
The cascading effect on the sale of goods and services has largely been eliminated by GST. Since the cascading effect was eliminated, the price of goods has gone up. Goods’ prices fall because of a ban on taxation of taxation.
GST is also heavily reliant on newer forms of technology to function. The entire process of registration, return filing, application for refund, and response to notices must be completed on the GST portal, which speeds things up.
GST is made up of what components?
The CGST, SGST, and IGST are the three taxes that apply in this system.
CGST: It is the tax imposed by the federal government on interstate transactions.
SGST: This is the state government’s tax on an intra-state transaction.
A tax collected by the federal government for interstate sales is known as the IGST.
Pre-GST Tax Laws
Many indirect taxes were levied by the state and the centre under the previous indirect tax regime. State governments primarily collected Value Added Taxes (VAT) as a form of taxation (VAT).
The central government levied a tax on interstate sales of goods. Sales of goods across state lines were subject to the CST (Central State Tax). Both the state and federal governments collected a variety of indirect taxes, such as the octroi and local tax, from residents. These led to a lot of tax overlap between the state and the federal government.
The central government, for example, levied excise duty on goods manufactured and sold. In addition to the excise tax, the state also imposed VAT. As a result, there was a cascading effect of taxes, also known as a tax on tax.
List of indirect taxes prior to GST implementation:
- Central levy of excise
- Additional Excise Taxes Additional Customs Taxes and Fees
- Customs officers are required to perform additional duties as part of their regular duties.
- VAT in Cessna
- Advertorials are subject to ad-taxes as well as the Central Sales Tax.
- Lottery, gambling, and betting taxes
All of the above taxes have been replaced by CGST, SGST, and IGST.
There are still some taxes in place, such as the 2 percent GST charged on interstate purchases via the issuance and use of Form C.
Certain non-GST goods are covered by this rule, including:
For human consumption: Alcoholic liquor for human consumption; Petroleum crude; High-speed diesel Motor spirit (commonly known as petrol); Natural gas; Aviation turbine fuel; and ethanol
Only the following types of transactions are covered:
Use in the production or processing process
These devices can be used in various sectors of industry including the telecommunications network, mining, the generation and distribution of electricity, and any other power sector