Differences Between GST and Current Tax Structure in India
The Goods and Service Tax (GST) is a single unified tax system which is based on the destination principle. Under this principle, tax is levied on goods and services in the place where they are consumed rather than where they are produced. It is also known as consumption tax. The purpose of GST is to unite India’s complex taxation system under ‘ One Nation, One Tax ’. To achieve this purpose, 17 central and state taxes will be subsumed, which would lead to removal of multiplicity of taxes and the cascading effect of tax on tax. This would lead to creation of a common market for all. Presently, several taxes are levied on sale and purchase of goods, namely, central excise duty, service tax, customs duty, central sales tax , VAT, countervailing duty (CAD) and special additional duty (SAD). These taxes shall be subsumed under Dual GST model except the customs duty. In the present tax regime, goods and services are taxed separately. Goods come under the purview of VAT while se