What is GST?
Goods and Services Tax (GST) is an indirect tax which replaces multiple cascading taxes. It was firstly introduced by France in 1954 and currently, it is active in more than 160 countries. India implemented the GST Law 2017 on July 1st and it has adopted the Dual GST model, the one followed by Canada. The most crucial aspect of this tax regime is the rate of GST that prevails on the various categories of products.
Indian GST model has three main components.
- CGST (Central Goods and Services Tax)
- SGST (State Goods and Services Tax)
- IGST (Inter-state Goods and Services Tax)
The Central government will collect this tax over the selling of goods and services.
Respective state government will collect this tax over the selling of goods and services
Will be collected by the central government on the interstate transaction of goods and services.The collected IGST revenue will be distributed among the states as per the view of the proposed GST Council.