GST & Tax Structure
Economy Advanced · GST और कर संरचना · 19 facts
101st Constitutional Amendment Act 2016: Introduced GST; inserted Article 246A (both Parliament and state legislatures can make GST laws) and Article 279A (GST Council).
GST implementation: July 1, 2017; launched with the slogan 'One Nation One Tax One Market'; replaced 17 indirect taxes.
GST rate slabs: 0% (food grains, health, education essentials), 5% (essential goods), 12% (standard goods), 18% (standard services/goods), 28% (luxury/demerit goods).
GST Council (Article 279A): Chaired by Union Finance Minister; all state Finance Ministers are members; decisions by 3/4 majority; apex body for GST rates.
Types of GST: IGST (Integrated GST, inter-state supply, collected by Centre), CGST (Central GST, intra-state, Centre's share), SGST (State GST, intra-state, State's share).
17 taxes replaced by GST: Central Excise, Service Tax, VAT, CST, Entertainment Tax, Entry Tax, Octroi, Purchase Tax, Luxury Tax, etc.
GST threshold: Rs 20 lakh annual turnover (Rs 10 lakh for NE states and hill states); businesses below threshold exempt from GST registration.
Composition Scheme: Small businesses with turnover up to Rs 1.5 crore can pay GST at a flat rate (1% for traders, 2% for manufacturers, 5% for restaurants).
GSTN (GST Network): Technology backbone of GST; private company with government shareholding; handles GST registration, return filing, payment.
E-way Bill: Mandatory for goods worth over Rs 50,000 moving inter-state; tracks movement of goods; reduces tax evasion.
ITC (Input Tax Credit): Businesses can claim credit for GST paid on inputs; reduces cascading effect (tax on tax) which was a major problem before GST.
GST exemptions: 0% on food grains, fresh vegetables and fruits, milk, eggs, unprocessed food, healthcare, and educational services.
Cess on 28% slab: Additional cess on luxury and sin goods (tobacco, vehicles, aerated drinks) over and above 28%; funds compensate states for revenue loss.
UTGST: Union Territory GST; levied in UTs without legislature (Dadra, Lakshadweep, Andaman, Chandigarh, Daman & Diu); replaces SGST.
GST compensation to states: Centre promised to compensate states for 5 years (2017-2022) for revenue loss due to GST; funded by cess; controversy arose during COVID.
GST revenue: India collected Rs 1.87 lakh crore GST in April 2023 — highest ever monthly collection; shows economy growth.
Petroleum, alcohol, and electricity are NOT under GST; states have power to levy their own taxes on these items.
Inverted Duty Structure: When GST on inputs is higher than on output; causes accumulation of ITC; government has rationalized some items to resolve this.
GST made India a common market by eliminating inter-state checkpoints; trucks now spend 50% less time at borders; logistics efficiency improved.