BASIC KNOWLEDGE OF GST

Goods and Services Tax (GST) is a indirect tax that was introduced in India in July 2017 to replace multiple indirect taxes previously levied by the central and state governments. GST is levied on the supply of goods and services, and it is aimed at creating a unified tax system across the country, making it easier for businesses to comply with taxes and reducing the tax burden on consumers. It is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. 

There are three main types of GST in India:

1. Central GST (CGST) – levied by the central government and applicable to intra-state supplies  (i.e within the same state).

 2. State GST (SGST) – levied by the state government and applicable to intra-state supplies.

 3. Integrated GST (IGST) – levied by the central government and applicable to inter-state supplies (i.e.between two or more states).

 In general, GST is calculated as a percentage of the sale price of goods or services.

The current standard rate of GST in India is 18% for most goods and services, although there are some items that are exempt from GST or are subject to a lower rate. The GST in India has four slabs - 5%, 12%, 18%, and 28% - depending on the type of goods and services. Essential items such as food, agriculture, and health services are taxed at a lower rate of 5% while luxury and demerit goods are taxed at 28%.

 GST is paid by the suppliers of goods and services, who are required to register with the GST authorities and file regular returns to report their GST liabilities and payments. The GST paid by suppliers can be claimed as input tax credit, which can be used to offset their GST liability.