What is GST (Goods & services tax)?
GST or Goods & Services Tax, is a tax which combines various indirect taxes being charged by Central and State governments, which resulted in multiple receipts/payment/compliance being needed for multi-state business.
GST is a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India (Except state of Jammu and Kashmir), to replace taxes levied by the central and state governments.
It is levied on both goods and services. The main aim of GST is to centralize taxation for businesses so as to relieve them of burden of compliance and better manage their cash and finances.
Important features of Goods & Services Tax
- GST is a value-added levied at all stages of the supply chain, right from manufacture to final consumption, where credit shall be allowed for taxes paid at previous steps as set-off
- GST would be applicable on the supply of goods or services, as against the present concept of tax on the manufacture and sale of goods or provision of services
- GST would be a destination based consumption tax ie, tax would accrue to the taxing authority which has jurisdiction on place of consumption.
