What is GST and how will the taxation structure change for Indian businesses?
The Goods and Services Tax (GST) is a single indirect tax that will replace all the current tax levies in India.
The GST will follow a dual component structure comprising of the SGST(State GST) and CGST(Central GST) for intrastate transactions. In case of interstate transactions, a single combined IGST(Integrated GST) will be paid to the Center.
The new GST tax structure will have four slabs:
Zero rate - 0%
Lower rate - 5%
Standard rates - 12% and 18%
Higher rate - 28%
An additional tax called the Additional cess will be applied on tobacco, luxury cars, and aerated drinks.
Under the GST, a unique PAN based 15-digit GSTIN will be assigned to all registered businesses and this number will be used for matching and reconciling transactions in the GST portal.