Goods and Service Tax is an indirect tax which the Government of India is planning to levy on all goods and services apart from those exempted by the GST law.
The GST taxation laws will put an end to multiple taxes like excise, CST, VAT, service tax etc., which are levied on different products, starting from the source of manufacturing, till reaching the end consumer. It will also stop distinguishing a goods from a service and will tax both equally.
For consumers, GST will help bring in the following benefits–
- Uniformity in Computing Taxes for Goods and Service-
GST will lead to the elimination of multiple excise, CST, VAT, service tax calculations.
- Uniform Tax Regime-
For both goods and services and less confusion in determining what constitutes a good or what is a service.
- Elimination of Double Taxation-
Double taxation means the consumer pays tax on an item, on which already government has collected tax from the manufacturer under some other head.
- More Transparent Pricing-
Currently hidden taxes actually push up the taxes on a majority of goods to anywhere in the 27% to 32% range. But with GST coming in, the % tax number is proposed to be much lesser – however the number has not been finalized yet.