TAX SYSTEM IN INDIA
A. There are two types of taxes in our country:
B. Largest source of income for government is from Corporation tax.
C. GST (Goods and services tax) subsumed all indirect taxes except alcohol, real estate and petroleum taxes.
D. GST was implemented from July 1st, 2017.
E. Shortcut to remember types of tax
- Wealth tax is abolished.
- All Indirect taxes are subsumed in GST.
1) GST was implemented on 1st of July.
2) It was introduced as The Constitution (One Hundred and First Amendment) Act 2017, following the passage of Constitution 122nd Amendment Bill.
3) The GST is governed by a GST Council and its Chairman is the Finance Minister of India.
4) Under GST, goods and services are taxed at the following rates, 0%, 5%, 12% ,18% and 28%. There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold.
5) India adopted a dual GST model, meaning that taxation is administered by both the Union and State Governments.
6) Transactions made within a single state are levied with Central GST (CGST) by the Central Government and State GST (SGST) by the government of that state. For inter-state transactions and imported goods or services, an Integrated GST (IGST) is levied by the Central Government.
7) Alcohol tax, Real estate tax and petroleum tax are kept out of GST.