Tax-GST

Tax-GST

GST is a comprehensive, destination-based and multi-stage tax charged on each value addition.

Each item goes through change-of-hands from the time it leaves the manufacturer till it reaches the final consumer. For instance, raw materials are purchased first, after which there is the manufacturing/production process. Then comes the warehousing of the goods before they are sold to a wholesaler. The product is then sold to the retailer before it is finally made available to the final consumer. GST is charged on each of the aforementioned stages, making it a multi-stage tax.

Goods are usually manufactured or produced in one state and sold to consumers in other states. GST is charged at the point of consumption, so if a product is manufactured in Karnataka and sold in Tamil Nadu, the whole tax revenue will go to Tamil Nadu, thus making GST a destination-based tax.

Types of GST

Based on the kind of transaction, there are four types of GST, viz. Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Integrated Goods and Services Tax (IGST), and Union Territory Goods and Services Tax (UTGST).

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