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Goods and Services Tax

Goods and Services Tax (GST) is a national-level consumption tax, streamlining indirect taxes. Businesses collect and remit GST on sales, with credits for taxes paid on purchases, aiming to reduce complexity and promote a unified tax system.

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Frequently asked questions

What is Goods and Services Tax (GST)?

Goods and Services Tax (GST) is a consumption tax levied on the supply of goods and services at each stage of the production and distribution chain. It is a comprehensive indirect tax that replaced various taxes in many countries to simplify the tax system.
Why is Goods and Services Tax (GST) important?

GST is important for creating a uniform tax structure, reducing tax cascading effects, and promoting transparency in taxation. It aims to streamline the taxation system, make businesses more competitive, and enhance compliance.
How does Goods and Services Tax (GST) work?

GST is a destination-based tax where the tax is collected at the point of consumption. It is levied on the value addition at each stage of the supply chain. Businesses collect GST on their sales and claim credit for the GST paid on their purchases, ensuring that tax is not applied on tax.
What are the key features of a GST system?

Key features include input tax credit, which allows businesses to offset the tax paid on inputs against the tax collected on sales, and a single, comprehensive tax that replaces various indirect taxes. GST typically has multiple tax rates based on the nature of goods and services.
How does GST impact consumers and businesses?

Consumers benefit from a simplified tax structure and reduced tax cascading, leading to potentially lower prices. Businesses benefit from improved compliance, a streamlined tax system, and the ability to claim input tax credit, reducing the overall tax burden.