Page 506 - SSB Interview: The Complete Guide, Second Edition

What is GST?

2. The broad framework of this Tax Regime is as under:

a. One indirect tax for the entire country.

b. Comprehensive, multi-stage, destination-based tax that is levied on

every value addition.

c. The single GST has replaced several taxes and levies that include:
central excise duty, services tax, additional customs duty,

surcharges, state-level value-added tax and octroi.

d. Other levies that were applicable to inter-state transportation of

goods have also been done away with, in the GST regime.

e. Transactions made within a single state are levied with Central
GST (CGST) by the Central Government and State GST (SGST)

by the State Governments.

f. For inter-state transactions and imported goods or services, an

Integrated GST (IGST) is levied by the Central Government.

g. GST is a consumption-based tax/destination-based tax; therefore,
taxes are paid to the state where the goods or services are

consumed, not the state in which they were produced.

h. Goods and services are divided into five tax slabs for collection of

tax — 0%, 5%, 12%, 18% and 28%.

i. Petroleum products, alcoholic drinks, electricity and real estate, are

taxed separately by the individual State Governments.
j. The GST Council is the governing body of GST. It is chaired by

the Union Finance Minister and has the finance ministers of all the

State Governments.

k. Revenue Sharing. The revenue sharing is as under:

i. Any sale within the state will be levied CGST and SGST (as