Introduction of Goods and Services Tax (GST)

GST Training In Agra. GST(Goods and Services tax) is a value added tax levied on most goods and services sold for domestic consumption. But GST is paid by consumers, but it is remitted by government by the business selling the goods and the services. In effect, GST provides revenue for the government.

It is a indirect federal sales tax that is applied to the cost of certain goods and services. The business adds the GST to the price of the product, and a customer who buys the product and pays the sales price plus GST. The portion of GST amount collected by the businessman and seller and forwarded to the government. It is also known as the value added taxes in some other countries.


France was the first country to implement the GST(Goods and Services tax) in 1954, and since then, estimated 160 countries adopted this tax system in some form or another. Countries with GST tax system includes Canada, vietnam, Australia, Singapore, United Kingdom, Nigeria, Brazil, South Korea, Monaco, Italy, Spain and India.


Most of the countries with GST tax system have applied single unified GST system, which means that a single rate applied throughout the country.

A country with unified GST platform merges central taxes (e.g. excise duty tax, service tax and sales tax) with state level taxes (e.g. transfer tax, sin tax, entry tax, entertainment tax and luxury tax) and collects them as one single tax.

Only handful countries like Canada and brazil, have a dual GST structure. Compared to a unified GST economy where tax is collected by a federal government and then distributed to the states.

In a dual system, the federal GST applied to the state sales tax. Canada, the federal government levies a 5% tax and some provinces/ state also levy a provincial state tax (PST), which varies from 7% to 10%. In this case, a consumer’s receipt will clearly have the GST and PST rate that was applied to his purchase value.



India established a dual GST structure in 2017, which was the biggest reform in the country’s tax structure in decades. The main objective of incorporating the GST is to eliminate tax or double taxation, which cascades for the manufacturing level to the consumption level.

India has, since launching the GST(Goods and Services tax) on July 1, 2017, implemented five different tax rates.

  • A 0% tax rate applied to certain foods, books, newspapers, cotton cloth and hotel services under Rs.1000.
  • A rate of 0.25% applied to rough industrial diamonds.
  • A 5% tax rate applied to apparel below Rs.1000, packaged food items, footwear under 500, etc.
  • A 12% tax rate applied to apparel over Rs.1000, frozen meats, cutlery, sugar, bio-diesel, etc.
  • An 18% tax rate applied to certain luxury items including makeups, pastries, swimming pools, footwear costing more than Rs.500, etc.
  • The final bracket, taxing goods at 28%, applied to 50 luxury products and those deemed “sinful,” including ceramic tiles, bidis , cars, motorcycles, etc.
  • However, Petroleum products and alcoholic drinks, electricity are not taxed under GST and instead are taxed separately by the individual state governments.



There would be three different types of levies in GST:

  1. CGST
  3. IGST

SGST would be leviable along with CGST on the supply made by a registered person within a state.

Just an SGST is leviable along with CGST on the supply made by the registered person within a state, UTGST would be levied along with CGST on the supply made by a registered person within a union territory.

Both SGST & UTGST would be leviable on an invoice for the supply of goods or services or both.

IGST would be leviable on import or Inter-state supply of goods and services or both.



All registered businesses have to file monthly, quarterly, and/or annual GST Returns based on the type of business. A return is a document containing details of income that a taxpayer is required to file with the tax administrative authorities. This is used by tax authorities to calculate tax liability.

Under GST, a registered dealer has to file GST returns that include:

  • Sales
  • Purchases
  • Output GST ( on sales )
  • Input tax credit ( GST paid on purchase )


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