GST V/s old taxation system

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gst-vs-old-taxationTaxes levied by the State Government was different across different Governments leading to the concentration of manufacture and production in States where the rates are less. However, in GST there is only one Tax and the rates shall also be the same across the country.

Multiple Taxes were levied under the old regime like Excise Duty, OCtroi, VAT, CST, Entertainment Tax, Luxury Tax. Under GST there is only one tax for the entire nation and that is GST. This reduces the Complexity in compliance.

Old taxation system:- Under separate laws, the tax is levied by Central Govt. and State Govt. On goods and services. In the Current taxation system import of goods into India is subject to a levy of customs duty and the person importing the goods is liable to pay customs duty at the applicable rates.

Service tax:- Tax levied by the government on service providers on certain service transactions, but its actually borne by the customers.
Tax Rates – Different tax rates for different item

GST SYSTEM:- There is no separate tax levied for goods and services. GST is a common tax applicable to both of these. In the GST System till the goods or services reaches the consumer this GST tax would allow smooth and continuous tax credit at all levels.
The tax will be subsumed in GST and levied as CGST, SGST, and IGST.
Tax Rates – There will be one CGST rate and a uniform SGST Rate across all states.

Calculate GST online now
Example: Product sold from Delhi to Kolkata
Old taxation system
VST @10%=Rs.100
Total cost=1100
 GST system
CGST @5%=Rs.50
SGST @5%=Rs.50
Total cost=Rs.1100

Also Read: Advantages and Disadvantages of GST

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