Goods and Services Tax (GST) is a value-added tax that was introduced in India on 1st July 2017, with the aim of simplifying the complex indirect tax system in the country. GST is a comprehensive, destination-based tax that is levied on the supply of goods and services.
Under the GST regime, all goods and services are classified into different tax slabs, based on their nature and the level of value addition at each stage of the supply chain. GST is levied at each stage of the supply chain, but the tax paid on inputs is allowed to be offset against the tax collected on outputs. This helps to avoid the cascading effect of taxes that used to occur under the previous tax system.
GST has replaced several indirect taxes that were previously levied by the Central and State governments, such as Central Excise Duty, Service Tax, Value Added Tax (VAT), and Octroi. The GST regime has brought about significant changes in the tax system in India, including the introduction of a single tax regime across the country, simplification of tax compliance, and reduction in the tax burden on businesses.
