GST

The GST (Goods and Services Tax) is a value added tax on most goods and services transactions in India. In India, due to non consensus between central and state government, the proposal is to introduce a Dual GST regime i.e. CGST and SGST.

It is planned to introduce on 1 April 2010, replacing the previous Value Added Tax (VAT) and designed to phase out a number of various State and Territory Government taxes, duties.

Central levies to be subsumed for Central Excise Duty, Additional Excise Duty, Excise duty under Medicinal and Toiletries Preparation Act, Additional Customs Duty (CVD) and Special Additional Custom Duty (SACD), Service Tax, Surcharges and Cess.

States Levies to be subsumed for VAT, Sales Tax, Entertainment Tax (not levied by local bodies), Luxury Tax, Taxes on lottery, betting and gambling, State Cesses and Surcharges relating to supply of goods and services, Entry tax (not in lieu of octroi).

Taxes, levies and fees not specifically related to goods and services should not be subsumed under GST.

Alcoholic beverages and petroleum products to be kept out of GST.

Tobacco products to be subject to GST with input tax credit.

View on whether natural gas to be kept outside GST to be taken after further deliberations.

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SGST

SGST is State Goods and Service Tax which is applicable if turnover is more than Rs 10 Lakh. ( still in discussion)

Administration of SGST to be given to the states

Threshold limit under SGST for goods and services may be adopted of INR 10 lakhs

Two rate structure – lower rate for necessary items and goods of basic importance and Standard rate for goods in general. Further, special rate for precious metals and list of exempted goods will be prescribed.

States Levies to be subsumed which are VAT, Sales Tax, Entertainment Tax (not levied by local bodies), Luxury Tax, Taxes on lottery, betting and gambling, State Cesses and Surcharges relating to supply of goods and services, Entry tax (not in lieu of octroi)

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