What is GST? Explained

So finally after so many debates GST (Goods and Services Tax) become a reality today. The motto of building a new India through one nation, one tax, and one market seems to be on its own track. The primary benefit of GST is to make things boon for households but it will reflect some benefits to other sections as well; they are as follows.

GST: Goods and Services Tax

Advantages of Goods and Services Tax

#1. It is Common Man Friendly

  • A huge number of items are either tax-exempt or under 5% tax slab.
  • Maximum benefits are given to the poor and the common man.
  • Will ensure that the poor get their due.
  • The level playing field for small traders in any part of the country.

#2. Many Advantages for Trade and Industry

  • A common procedure for registration, duty payment, return filing and refund of taxes.
  • Seamless flow of tax credit from a manufacturer, a supplier to use, retailer to eliminate cascading of taxes.
  • More efficient neutralization of taxes to make our exports more competitive internationally.
  • Benefits of exemption or composition scheme for a large segment of small-scale suppliers to make their products cheaper.

#3. It Will Benefits Our Economy

  • To create a Unified Common National Market.
  • To make India a manufacturing hub.
  • To boost investment and exports.
  • To generate more employment by increased economic activity.

#4. Now it is Simplified Tax Structure

  • Reduction in the multiplicity of taxes now leviable on goods and services, leading to simplification.
  • Simpler tax regime with fewer exemptions.
  • Harmonization of laws, procedures, and rates of tax across the country.
  • Common system of classification of goods and services to ensure certainty in tax administration.

#5. It Will Create One Economic India

  • Freedom of movement of goods and services.
  • Consumers benefit from increased competition.
  • The level playing field for producers and consumers across the country.
  • Strengthening the sense of nationhood and unity.

GST Slabs

According to reports, this simple tax method will bring down the prices for most households. Almost 81% of items to fall below / in 18% GST slab.

Check out the below table for GST rate slabs.

GST @ 0%GST @ 5%GST @ 12%GST @ 18%
Unpacked Foodgrains, Honey, PaneerApparels (up to ₹1,000)AlmondsHair Oil
Fresh VegetablesFootwears (up to ₹500)ButterToothpaste
Unbranded Atta, Maida, and BesanAgarbatti, Coir MatsGheeSoap
Palmyra Jaggery, Gur, Salt, KajalCashew Nuts, RaisinFruit JuicePasta
Milk, Curd, Lassi, EggsCoconut WaterCorn Flakes, Packed Sugar
Phool Bhari JhadooMilk Food for babies, Packed Paneer, TeaPreparation of Vegetables, Fruits, and Nuts or Other Parts of Plant.Soups
Children’s Drawing and Colouring BooksRoasted Coffee BeansPickle, Murabba, Chutney, Jam, and Jelly.Ice-creams
Education ServicesEditable OilsMobilesToiletries
Health ServicesDomestic LPG, PDS KeroseneUmbrellaComputers, Printers

* There is one more slab which is 28%, especially for luxury items and services.

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