Knowing the GST rates is important for every consumer and firm in India as it affects every industry and the economy of the country. With every change issued by the GST council in the GST rates, it is important to review your position and get informed of how these changes may affect your future. If you haven’t been following the latest updates on GST, this guide will effectively cover everything from the basics of GST to how the modern tax slabs will impact the economy. Let’s begin with the basics:
What is GOODS AND SERVICE TAX?
Goods and Service tax is an indirect tax charged by the Indian Government on the sale of goods and services for the purpose of generating revenue. The tax is charged by businesses that provide these goods and services, which later charge the tax from their consumers.
What are the Types of GST?
As of now, GST has three major categories: CGST, SGST, and IGST. Let’s explore them in detail:
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CGST
CGST or Central GST is levied on the inter-state sale of goods and services. The tax is levied by the central government, and the revenue is shared between central and state governments.
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SGST
SGST or State GST is the tax levied on the intra-state(within the same state) sale of goods and services. This is levied by the state government, and the profits are retained by the state government. While the rates of CGST remain consistent, SGST changes with each state.
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IGST
IGST or Integrated GST is levied by the central government on the inter-state(between two states) supply of goods and services between two states. Here, the revenue is again shared between the central and state governments.
What are GST Rates?
GST rates are the exact percentage of tax that is levied under various types of GST. The tax rates are levied on the final invoice generated for the sale, and the GST rates must be separately defined in the invoices. For transactions within a state, the rates of SGST and CGST usually remain the same, while IGST is usually higher.
What are the Updates in GST Rates in 2023?
During the final week of December, certain changes and modifications were discussed on the GST rates in India. These changes were also approved and have been implemented since January 1, 2023. The changes have been implemented by the GST council, which has defined the updated GST rates for various commodities. Moreover, it is important to note that the revisions mostly targeted the concerns of the citizens regarding the current regressive or inverted tax system that charges a greater percentage of income from lower-income groups than higher-income groups. Some other changes have also been implemented to improve revenue.
GST Rates Decided at the 48th GST Council Meeting
Let’s explore some of the recent updates in the 48th GST Council Meeting on the modern GST rates:
Final Thoughts
Understanding and keeping yourself up-to-date with various GST tax rates is vital for the progress of the country and to ensure that you make better financial decisions. If you require assistance setting up your GST registration or filing your taxes, please feel free to get in touch with Lawgical India. Our team of legal, taxation, and registration experts will help solve all your queries and provide results with a smooth and effective process.
