How would GST Rates in India simplify the current Indian tax structure?

How would GST Rates in India simplify the current Indian tax structure?

When we talk about the Indian tax structure, the first thing that comes to our mind is the complexity attached to it. Various types of direct and indirect taxes, services charges, and many other taxes make the structure more painful for businesses and common people to understand. Indian Government has realized this complexity and decided to simplify it by introducing the GST (Goods and Services Tax) on the midnight of June 30, 2017. Following the notion of ‘One Nation, One Market, One Tax’, GST is here to redefine the taxation structure of India.

You must be wondering about what is GST? GST is a value-added tax that is set out at each stage of the supply of goods and services only on the amount of previous value achieved. It helps to bring a kind of transparency into the Indian tax system which was absent in the previous model. Also, it will help in removing the inefficiencies like tax-on-tax structure so that an individual doesn’t have to pay tax to the state and central government separately. In this article, we will be telling you all about it, so that you get to know how simple it is to understand the ​GST​. Read on to know more!

What are the different Tax Slabs and Final GST Rates in India?

Our country has an economy worth 2.4 Trillion Dollar and it needed a simplified tax structure and GST was the need of the hour. Before GST, there were various direct and indirect taxes, state and central government taxes, etc. But now, there are only three taxes under GST namely Central GST, State GST, and International GST.

To make it understandable for common people, the GST council has divided the GST tax structure into four tax slabs of 5%, 12%, 18%, and

28%. There are a total of 1300 goods and 500 services which will come under these ​GST Rates in India​. You can have a look at the various goods and services in different tax slabs of GST.

5% Tax Slab:​ Under this GST tax slab, around 14% of the total goods and services fall in this category. Some of them are frozen vegetables, coffee, tea, spices, pizza bread, kerosene, coal, medicine etc.

12% Tax Slab:​ A total of 17% of goods and services fall under this category of tax slab. Some of the goods and services are sausages, ketchup & sauces, sewing machines, spectacles, carrom boards, ludo, etc.

18% Tax Slab: O ​ ut of all the goods and services, 43% fall under this category. Cameras, speakers, monitors, printers, pasta, biscuits, cornflakes, sanitary napkins, notebooks are some of the products that fall under this category.

28% Tax Slab:​ 19% of the total goods and services fall under this category. Some of them are sin goods (alcohol, cigarettes), deodorants, shaving creams, hair shampoo, dye, sunscreen, movie tickets above INR 100, etc.

What are the Taxes that GST has replaced?

After the implementation of GST, a number of indirect taxes such as Central Excise Duty, Value Added Tax (VAT), Central Sales Tax (CST), Entertainment Tax, Entry Tax, Purchase Tax, Luxury Tax, Advertisement Tax etc have been removed from the taxation structure to make it more transparent and productive.

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