By Blog 
Introduction:
A unified, multi-stage, destination-based tax on the delivery of goods and services is India’s. Goods and Services Tax (GST). It was put into effect on July 1, 2017, with the goal of establishing a unified national market and streamlining the nation’s intricate indirect tax system. The final customer is ultimately responsible for paying the tax, which is imposed at every stage of the transaction.
How the GST Works:
Prior to the GST, a product could be subject to several taxes at different points during the manufacturing and distribution process, creating a “tax on tax” or cascading effect. As a result, consumers’ final cost went up. A single tax known as GST took the role of several indirect taxes, including central excise duty, service tax, and VAT. Businesses are able to remit tax just on the value they create at each stage and claim an input tax credit, often known as the Input Tax Credit or ITC, for taxes paid on inputs. This makes the tax system more transparent and gets rid of the cascading impact.
Example: A manufacturer, for instance, purchases raw materials, pays GST on them, and then produces a product. They charge GST when they sell the goods to a wholesaler, but they can deduct their tax obligation from the raw materials’ ITC. Similar actions are taken by the wholesaler when selling to a retailer and the retailer when selling to the end user. Taxes are collected by the government at every level, but only on value added.
Types of GST:
CGST: The central government imposes the Central Goods and Services Tax (CGST) on intra-state supplies, or transactions that take place inside the same state. The central government receives the revenue.
SGST: The state government imposes the State Goods and Services Tax (SGST) on supplies that are made within the state. The corresponding state government receives the funds. Both CGST and SGST are applied to intrastate transactions. For instance, 9% CGST and 9% SGST will be applied if the GST rate is 18%.
IGST: The central government imposes the Integrated Goods and Services Tax (IGST) on imports, exports, and interstate deliveries, or transactions between states. The governments of the destination state and the federal government then split the money that was collected.
UTGST: Like the SGST, the Union Territory Goods and Services Tax (UTGST) is imposed on goods and services in Union Territories like Chandigarh and Lakshadweep that lack their own legislature.
Benefits of GST:
Simplified Tax Structure: The indirect tax system has been unified nationwide under the “One Nation, One Tax” policy, which has made it simpler for consumers to comprehend the taxes they pay and for businesses to function.
Elimination of Cascading Taxes: GST has decreased the overall tax burden on products and services by enabling businesses to claim ITC, which may result in cheaper costs for consumers.
Easier Compliance: A single platform (GSTN) handles every step of the GST procedure online, from registration to return filing. This has decreased paperwork and improved the efficiency of tax compliance.
Enhanced Transparency: By giving a detailed picture of the taxes paid and collected at every point, the system lessens the opportunity for corruption and tax evasion.
Economic boost: By eliminating interstate tax barriers, GST has increased logistical efficiency, resulting in a unified national market that is anticipated to support India’s GDP expansion.