What is GST?

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The Goods and Services Tax, or GST, is an indirect tax law applicable across India. It has replaced multiple indirect taxes such as excise duty, service tax, value-added tax, octroi, entry tax, and luxury tax. Laws pertaining to the same were put into effect on July 01, 2017, in India. This indirect taxation system has gone through multiple amendments since to arrive at the current juncture. However, it must be noted that GST does not replace customs duty, which is still mandatory on imported goods and services. Every kind of product and service attracts a different tax rate under GST. For example, luxury or sin goods are classified to attract a higher interest rate, whereas necessities have been included in lower and nil rate slab rates.

History of GST

In 2000, the late Atal Bihari Vajpayee, the then prime minister of India, set up a committee to draft new indirect tax law. However, the implementation process took several years, as a result of which, the bill had to see and endure multiple introductions, amendments, obstacles, and rescheduling. Below is a summarised version of the chain of events pertaining to GST that transpired since 2000 in chronological order, starting from drafting to the final implementation of the GST Act.

Year	Event
2000	PM Atal Bihari Vajpayee sets up a committee to draft the Goods & Services Tax law for India.
2004	A task force is put together to figure out the requirements to create and implement GST with the purpose of improving the indirect tax system.
2006	The Finance Minister of India, P. Chidambaram, schedules the introduction of the Goods & Services Tax on April 01, 2010.
2007	The decision to phase out Central Sales Tax (CST) is made, after which CST rates are reduced from 4% to 3%.
2008	The EC finalises the dual structure of GST for separate legislation and levy.
2010	The introduction of GST is postponed citing structural and implementing hurdles.
2011	The Constitution Amendment Bill gets introduced with the aim of enforcing the Goods & Service Tax Law.
2012	Discussion initiated by the Standing Committee over GST gets stalled due to lack of clarity on Clause 279B.
2013	The Standing Committee presents its report on GST.
2014	The Finance Minister of India reintroduces the GST Bill to the Parliament.
2015	The Lok Sabha approves the Bill but it gets stalled in the Rajya Sabha..
2016	The Goods and Services Tax Network (GSTN) goes live; simultaneously, the GST Bill as well as all amendments made up until this point get approved by the President of India.
2017	The Cabinet approves the creation of four supplementary bills on GST. Post which, the Goods & Services Tax Law gets implemented in full force on July 01, 2017.

Differences Between GST and the Indirect Tax Regime

	GST Tax Structure	Old Indirect Tax Structure
Regulatory Law(s)	There is only one law to regulate GST, which is the GST Act of 2017.	Separate laws existed to regulate the various indirect taxes. VAT, meanwhile, was at the discretion of the states.
Tax Structure	The payable GST is made of two components, namely the Central Goods and Services Tax (SGST) and the State Goods and Services Tax (SGST. Half of the collected GST revenue goes to the state while the other half goes to the Centre.	Indirect taxes were a summation of multiple taxes, including VAT, CST, and Excise Duty, among others.
Cascading Effect (Tax on Tax)	The cascading effect is reduced, which makes the regime very simple.	High cascading effect of taxes.
Tax Burden	The tax burden is usually lower.	Tax burden used to be significantly higher due to the cascading effect of taxes.

Learn about the online GST registration process and fees.

Types of GST Charged in India

GST is primarily categorised into three different types, i.e. CGST, SGST, and IGST.

Central Goods and Services Tax (CGST):The Central government collects the CGST tax, which is levied on the intra-state supply of products and services. The introduction of the same led to the abolition of central taxes such as central excise duty, customs duty, service tax, among others.

State Goods and Services Tax (SGST):As the name implies, SGST is that component of the tax which goes to the state government. SGST is applicable on goods and services sold within the state. This has, in turn, replaced several other taxes, such as the value-added tax (VAT), entertainment tax, entry tax, and state sales tax, among others.

Integrated Goods and Services Tax (IGST):Integrated GST is charged on products and services that are produced and consumed in two different states. The revenue collected from IGST is distributed among the relevant states. IGST was implemented with the intention of streamlining the tax process.

Union Territory Goods and Services Tax (UTGST): UTGST, as the name suggests, is applicable on goods and services supplied within the union territories of India, namely Chandigarh, Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, and Lakshadweep. UTGST is collected in addition to CGST instead of SGST.

Advantages of GST

1. Benefits for Traders and Manufacturers

Compliance becomes easy
Brings uniformity in tax rates and structure
Removal of the cascading or compounding effect caused by the imposition of multiple taxes
Paves the path for the development of a common national market

2. Benefits for Central and State Government

It is relatively easier to implement and administer
An improvement in compliance and revenue collections
Better revenue effectiveness

3. Consumer Benefits

Payment of a single and transparent tax
Reduction of the burden on taxpayers

Tax Laws Before GST

In the earlier tax regime, many indirect taxes were levied by both state and central governments. The states mainly collected taxes in the form of Value Added Tax (VAT). Every state had a different set of rules and regulations. The centre taxed inter-state sale of goods.

CST (Central State Tax) was applicable for the inter-state sale of goods. These indirect taxes, such as the entertainment tax, octroi, and local tax, were levied together. The following are the list of indirect taxes that were applicable in the pre-GST regime:

Central Excise Duty
Duties of Excise
Additional Duties of Excise
Additional Duties of Customs
Special Additional Duty of Customs
Cess
State VAT
Central Sales Tax
Purchase Tax
Luxury Tax
Entertainment Tax
Entry Tax
Taxes on advertisements
Taxes on lotteries, betting, and gambling

Taxes like CGST, SGST, and IGST have replaced all the above taxes.

What are the new Compliances Under GST?

Apart from filing the GST return, the new GST tax regime has introduced several new systems. They are:

1. E-Way Bill

Eway bills are typically issued by a supplier when they wish to send their goods to another state or union territory. These eway bills are necessary for the commercial movement of goods valued over ₹50,000 across state borders. The online eway bill login portal through which you can generate the document in question is ewaybillgst.gov.in. Alternatively, you can generate one through a text message or via the official application that is available on Google Play Store as well as the Apple App Store. Once the way bill is generated, the supplier, the recipient, and the transporter receive a unique e-way bill number, which essentially greenlights the movement of goods from point A to B.

2. E-Invoicing

The e-invoicing system requires large businesses with annual aggregate turnover of more than ₹100 crore to obtain a unique invoice reference number. The same will be applicable for every business-to-business invoice that should be uploaded on the GSTN's portal. The portal verifies the genuineness of the invoice and authorises the same with a digital signature and a QR code.

E-invoicing additionally allows the interoperability of invoices and reduces data entry errors. It is designed to pass the invoice information directly from the Invoice Registration Portal (IRP) to the GST portal and the e-way bill portal. It will, therefore, eliminate the requirement for manual data entry while filing the ANX-1/GST returns and for the generation of part-A of e-way bills.

What Changes Does GST bring in?

The Goods & Services Tax brought a major change in the taxation visuals in India. Earlier, different taxes were paid separately to the state and the centre. However, GSTIN subsumed all taxes into one, and now there is the practical application of 'One Nation, One Tax.' Some of the changes that GST brought in are as follows:

No multiple taxes to be paid
Replacement of indirect taxes like excise duty and sales tax into one
Clear distinction of taxes on luxuries and necessities
Introduction of simplified ways to fill Income Tax Returns and taxes, for instance, through the official GST online portal.
Boost for Real estate and MSME sector
Ease for transportation of goods, as no separate taxes
Tax administration under both State and Central governments
Transparency in the taxation process

Types of GST Returns

GST Articles

GST is a tax charged on the consumption and supply of goods and services in India. The Government collects it from the ultimate point of consumption.

The full form of GST is Good and Services Tax.

There are four types of GST, namely CGST, SGST, IGST, and UGST.

Both Central and State Governments collect IGST based on the prefixed revenues.

Yes, the GST bill can be paid online through the GST official website.

GST News Updates

28% GST imposed on online gaming, tax dues may amount to ₹45,000 Crores

At the 51st GST Council Meeting, held on 2nd August 2023, authorities decided to levy a 28% tax on online gaming platforms, casinos, and horse racing, from October 1. Prior to this, skill-based gaming platforms were asked to pay 18% GST, while luck-based gaming platforms, including online casinos, were liable to pay 28%. Following this revision in GST laws, firms that provide services under either category will now be required to pay 28% tax on full value.

The implementation of the revised tax will be reviewed after 6 months. As per an official report by The Economic Times, online money gaming firms might be facing potential additional tax dues of approximately ₹45,000 Crores. The figure is as per the unsettled GST liabilities evaluated by The Central Board of Indirect Taxes and Customs (CBIC) for such firms since 2017.

- Aug 13, 2023

Vivek Johri, Chairman of the CBIC, Says That Rationalisation of GST Rates be Carried Out Gradually

The Chairman of CBIC, Central Board of Indirect Taxes and Customs, Vivek Johri, recently stated in an interview that any modifications in the GST rates should be brought into effect gradually. As per Johri, this will ensure the stability of consolidated revenues, as it is only through a calibrated approach that the consolidation of revenue is not harmfully affected. According to him, there would be much better scope for accepting rate rationalisation

In the interview, the CBIC Chairman also talked about the current slab structure. He mentioned that the current slab structure will eventually converge towards three or four rates: a median rate, a merit rate, and a demerit rate.

- Jul 10, 2023

Three More Months Added to the GST Amnesty Scheme

The last date of the GST Amnesty Scheme has been extended for three more months as a lot of tax consultants and taxpayers had demanded for it. The last date is 30th September now. The scheme was brought in on 31st March, 2023 by CBIC. The main objective of this scheme was to aid taxpayers whose registration had been canceled before 31st December, 2022 and were not allowed to submit revocation application and appeal within the prescribed period of time. Under this scheme, the benefit was given to such individuals so that they do not have to pay heavy penalties.

- July 03, 2023

Geo-Tagging and Biometrics Will Be Used by CBIC to Tighten GST Regulation

After the detection of approximately 12,500 fake entries, GST authorities are looking to tighten registration norms with geo-tagging and biometric authentication of high-risk entities. Central Board of Indirect Taxes and Customs (CBIC) Chairman, Vivek Johri stated that the return filing system will be further tightened to prevent fraudsters from misusing Aadhaar identification and PAN to get GST registration. It will be a special two-month drive that will be conducted jointly by CBIC and state governments.

- July 03, 2023

Krishna Byre Gowda is chosen to represent Karnataka in the GST Council by CM Siddaramaiah

Krishna Byre Gowda, Karnataka’s Revenue Minister will represent Karnataka in the GST Council. CM Siddaramaiah has nominated Gowda once again. The GST Council which is chaired by Nirmala Sitharaman, Finance Minister has finance ministers as its members. As CM Siddaramiah holds the portfolio for finance, he has assigned this responsibility to Gowda. This is the third time that Gowda is representing Karnataka on the council. He had previously attended GST council meetings for more than two years in his Congress regime and during the congress-JDS coalition government.

- June 15, 2023

The 50th GST Council meeting is to be held at the end of June

The council is all set to launch a Goods and Services Tax Appellate Tribunal (GSTAT). The tribunal will handle all the grievances and tax disputes of the government and citizens.

The President, a judicial member, a technical member (state), and a technical member (centre) will make up the "Principal Bench" of the GSTAT in New Delhi. State benches will be designed in the relevant states. States with fewer than 20 million residents may only have one court, whereas those with 20 to 50 million may have two.

- June 08, 2023