GST

GST stands for Goods and Services Tax. It is a comprehensive, multi-stage, destination-based indirect tax levied on the supply of goods and services. It essentially replaces a complex web of older indirect taxes (like VAT, excise duty, and service tax) with a unified tax structure 1. How It Works Instead of a tax being calculated on top of a tax (the "cascading effect"), GST is levied only on the value added to a product at each stage of the supply chain. Businesses can claim input tax credit (ITC) for the tax they already paid on raw materials, meaning the final burden is ultimately borne by the end consumer. 2. Types of GST (In India) Because GST is a dual-levy system, both the central and state governments collect it simultaneously on transactions: CGST (Central Goods and Services Tax): Levied by the Central Government on intra-state supplies. SGST (State Goods and Services Tax): Levied by the State Government on intra-state supplies. IGST (Integrated Goods and Services Tax): Levied by the Central Government on inter-state supplies and imports/exports. The revenue is then shared between the Centre and the destination state where the goods are consumed. UTGST (Union Territory Goods and Services Tax): Levied in Union Territories in place of SGST. 3. Key Benefits "One Nation, One Tax": Replaces multiple cascading taxes with a single, unified national market. Transparency: Eliminates the hidden tax-on-tax system, lowering production costs. Simplified Compliance: Standardized digital filing and tracking systems