Which of the existing taxes are proposed to be subsumed under GST

By Registrationwala

3rd April 2017


Good and Service Tax is the indirect taxation system which leads lesser confusion and transparency among the tax payers. Good and Services is in its final stage Since many bills have been passed by the GST council. Taxation system plays a crucial role in the economy of any country. Therefore GST will it affect many forms of Industries and sectors in India. GST introduction will acquire forms taxes given below

Central Excise duty is levied on a manufacturer or producer in respect of the commodities produced or manufactured by it. It is with an intention to sell or proceed to a sale of those particular goods. Matters related to all indirect taxes are controlled by the department of revenue of the ministry of finance through statutory board named the Central Board of Excise and Customs [CBEC]. This board was constituted under The Central Board of Revenue act 1963, and Central Board of Direct Tax [CBDT] is also constituted under this act.

Duties of Excise (Medicinal and Toilet Preparations)-is the form duty applied on Medicines, Drug, and other forms pharmacy materials. Alcohols are used for the preparation of medicines. Alcohol used for drinking and manufacturing of perfumes is subjected to the higher duty than medicine preparation. This duty came into enforcement in 1955.Duties are applied for lesser consumption.     

Additional Duties of Excise means the duties of excise levied and collected under sub-section (1) of Section 3; Union territory is not included in State  It shall be levied and collected in respect of the goods described in column (3) of the First Schedule produced or manufactured in India and on all such goods lying in stock within the precincts of any factory, warehouse or other premises where the said goods were manufactured, stored or produced, or in any premises appurtenant thereto duties of excise at the rate or rates specified in column (4) of the said Schedule.

Special Additional Duty of Customs (SAD) is duty paid on imported goods. Importer could claim for the refund after subsequently imported goods. Importer shall pay for value added tax or Sales tax. It specifically indicates goods covered inside. No additional duty of custom is levied. 

Service Tax is levied by the Central Government of India on services. It excludes services covered under negative list and considering the Place of Provision of Services Rules, 2012 and collected as per Point of Taxation Rules  People liable to pay service tax are governed by Service Tax Rules, 1994 he/she may be the service provider or service receiver or any other person made so liable. It is a form indirect tax wherein the service provider collects the tax on services from service receiver and pays the same to the government of India. Service tax rates have been increased to consolidate rate at 14% +0.5%+0.5%= 15% of a value of services provided or to be provided.

State taxes that would be subsumed under the GST are:

Central Sales Tax is a tax levied on sales. These are effected in the course of inter-State trade or commerce. According to the Indian Constitution, States cannot levy sales tax on any sales or purchase of goods that takes place in the course of interstate trade or commerce. It was enacted in 1956 to formulate principles for determining when a sale or purchase of goods takes place in the course of interstate trade or commerce.

Luxury Tax is levied on luxury goods. It is the type of tax levied on products not considered essential. This type of tax may be modeled after a Sales Tax or VAT, charged as a percentage on all items of particular classes, except that it mainly affects the wealthy because the wealthy are the most likely to buy luxuries such as jewelry, expensive cars, etc. This also includes purchases over a certain amount; for instance, some U.S. states charge the luxury tax on real estate transactions over a limit. 

Entry Tax is a form of tax imposed by the state government in India on the movement of Goods. This form of tax levied by the recipient state to protect its tax base and was introduced on 1 September 2000.Entry Tax applies to dealers, industrial, commercial or trading undertakings, central and state government companies, firms, societies and clubs which carry on business.

Entertainment and Amusement Tax are the forms of tax imposed by the government on feature films getting a wide release in India and are reduced from gross collections. It also includes major commercial shows and big private festivals. There is the term used ‘Nett’ is the amount after deducting entertainment tax.

VAT was introduced as an indirect value added tax (VAT) into the Indian taxation system. The existing general sales tax laws were replaced with the Value Added Tax Act (2005) and associated Value Added Tax rules.

Taxes on advertisements is the form of tax system levied on advertisement (printed, Digital, Television).These Taxes are collected by the state government according to the product of the brand. In some cases, the tax is levied by the Central Government. 

Purchase Tax is a form of tax levied on the product which is purchased on the higher amount of goods. This type tax is similar to the Luxury Tax in some perspective    

Taxes on lotteries, betting and gambling are the forms of taxes levied on the prize, rewards, money won or achieved by the person. These are mainly in case Cultural events, Sports events, Game shows etc. Tax are liable on the forms of asset depending upon the achievement.      



Which of the existing taxes are proposed to be subsumed under GST