What is GST

GST Tax refers to the Goods and Services Tax, which is a comprehensive indirect tax levied on the supply of goods and services in India. Introduced on July 1, 2017, GST replaced a complex structure of multiple indirect taxes such as central excise duty, service tax, value-added tax (VAT), and others. The GST system is designed to simplify the tax structure, reduce tax evasion, and promote ease of doing business.

Under the GST regime, goods and services are taxed at multiple rates, which are classified into four main tax slabs: 5%, 12%, 18%, and 28%. Additionally, certain goods and services are exempt from GST, while others are subject to a special rate of 0.25% or 3%.

The GST system operates under a dual model, with both the central government and state governments having the authority to levy and collect GST. The taxes collected under GST are divided between the central and state governments based on a pre-defined formula.

GST is structured as a destination-based tax, meaning that it is levied at the point of consumption rather than at the point of origin. This ensures that the tax burden is borne by the final consumer, regardless of the number of stages involved in the supply chain.

Overall, GST represents a significant reform in India's tax system, aiming to create a unified national market, reduce tax cascading, and promote economic growth and development.