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Amit Goyal , 26 April 2021  

What is GST?

Ø       GST is a comprehensive value added tax on good and service.


Ø       It is Collected on value added at each stage of sale or purchase in each supply chain


Ø       No differentiation between goods and services as GST is levied at each stage in the supply chain.


Ø       Seamless input tax credit throughout the supply chain.


Ø       At all stages of production and distribution taxes are a oss through and tax is borne by the final consumer




Why GST?

Ø       Simple Structure of Tax


Ø       Only one or two rate of tax or duty 


Ø       Increased in collection of Revenue


Ø       Less transaction cost


Ø       Only one return


Ø       100% tax credit possible



At present                                         After GST


Goods   10000.00                                              Goods               10000.00         

ED(10%)       1000.00                                              GST(10%)           1000.00

Sale value   11000.00                                              Sale value         11000.00


Cost            11000.00                                              Cost                  11000.00

Vat(4%)        440.00                                              GST                   1100.00         

Sale value11440.00                           (-)Tax Credit              1000.00                     

                                                                              Sale value         11100.00




Challenge Aheads


Ø       Sharing Ratio of revenue between Central Govt. and State Govt.


Ø       Rate of Tax to be imposed


Ø       Integration of large number of Central and State Tax – Multiple of Tax and tax rates.





Ø       More than 140 countries have been already use GST System


Ø       Most of countries have Single rate system


Ø       But in Canada and Brazil have dual rate system


Ø       Standard rate of GST is 15- 20 % 



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Category GST, Other Articles by - Amit Goyal