GST is implemented in India from July 1st, 2017. What is GST? How it is different from previous tax structure. Consider this business structure, Buying Raw Materials
Manufacturing -> Sell To Warehouse or Wholesaler -> Sale To Retailer -> Final Sale To Consumer ->
For example, A shoe manufacturer need leather and plastics after production he sells to the wholesale team, Hence they will add labels with additional value to the products. After this, The retailer buys this product and after separate packaging process, they will increase the value to the shoes.
But GST will be levied on all transactions happening during the entire manufacturing chain. That means instead of the excise duty, State wise VAT and the point of sale VAT there is only GST.
The shopkeeper has paid a tax when he bought the item from the wholesaler. To recover that amount, he passes the liability to the customer. GST means the final liability on the end consumer is decreased.
There 3 Kind of GST
CGST: where the revenue will be collected by the central government.
SGST: where the revenue will be collected by the state governments for intra-state sales
IGST: where the revenue will be collected by the central government for inter-state sales
Goods and Service Tax (GST) as the name suggest is one single tax on the supply of goods and services, right from the Manufacturing to the ultimate delivery to a customer.
ie, The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.
GST Simple Explanation | Hindi