9th April 2017
GST or Goods and Service Tax is the latest addition to India’s indirect taxation list. It is set to roll out from April 1st onwards. It is a unified nation-wide tax and will be charged from individual sellers and traders whose total turnover exceeds the exemption limit of Rs. 20-lakh per annum.
Earlier, both the state and central governments charge multiple taxes from traders and businessmen for procuring, producing and transporting goods to various places. Such taxes were charged at various stages of the production process and supply of goods.
But after the introduction of GST in the system, all other taxes will be subsumed in it. Businessmen would now just need to pay a unified GST instead of several other taxes. Central Excise Duty or CED is a form of indirect taxation that is charged on the production of the excisable goods in India. Central Excise will be largely removed from India’s taxation list from this financial year onwards. GST will include a portion of Central Excise too which will directly go to centre’s share.
Central Excise Duty or Tax is paid at the time of removing manufactured goods in the first stage of the distribution process. But from this year onwards, GST will be charged only at the final stage of distribution chain of the goods and services.
There are some speculations that Central Excise might be levied on Petroleum and Petroleum products but GST won’t be charged on Petroleum sector.
The Central Excise duty is categorized in three forms; Basic excise duty, Special excise duty and additional excise duty. GST is classified into State GST (SGST), Central GST (CGST) and Integrated GST (IGST). The rates of excise tax vary from time to time. The GST rate has been set at 5%, 12% 18% and 28%.
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