Mathematical Study of GST (Goods and Services Tax)

GST is destination-based, which means the tax revenue belongs to the state or union territory where the goods or services are finally consumed. It is collected by businesses at each stage of the supply chain, but through Input Tax Credit (ITC), businesses can claim credit for tax already paid on their purchases. As a result, the final consumer ultimately bears the GST burden.

Goods mean every kind of movable thing/property, i.e. anything which can be taken (moved) from one place to another. 

Goods do not include money and securities. Securities mean: shares, stocks, bonds, debentures, etc. 

Services mean anything other than goods, money and securities. Services include activities relating to the use of money, e.g. banking services, insurance services, etc. 

Prior to 1^st July 2017, we had a number of indirect taxes such as VAT, excise, service tax, etc. From 1st July 2017 onwards, the government of India has abolished all such indirect taxes and introduced a new (indirect) tax called Goods and Services Tax (GST). 

• Single Tax System: Many indirect taxes are combined (subsumed) into one.

• Dual Model: Tax is levied equally by both Central and State governments.

• No Cascading Effect: Removes tax-on-tax, which helps control prices.

• Statewise Registration: Traders need separate registration for each state.

• Transparency: Brings clarity to transactions and is easy to understand.

• Tech-Driven: Uses technology for fast and speedy decisions.

• Economic Boost: Supports the 'Make in India' project and improves the quality of goods for global competition.

• Compliance: GSTIN holders must keep proper records and pay on time.

1. Nationwide Tax: GST is a single indirect tax that creates a unified common market across the country.
   

2. Excluded Taxes: Certain taxes remain outside GST, such as Basic Customs Duty, Road and Toll Tax, Stamp Duty, Property Tax, Electricity Duty, Excise on Liquor, and Petroleum taxes.
   

3. Registration Limit: Only registered businesses can collect GST, mandatory if annual turnover exceeds \[ \text{₹}20 \text{ lakh} \] (or \[ \text{₹}10 \text{ lakh} \] in special states).
   

4. Value-Added Tax: GST applies to incremental value, allowing Input GST on purchases to be offset against Output GST on sales.

5. Uniform Rate ("One Country One Tax"): Tax rates are consistent across all states and UTs.

6. Destination-Based Tax: Tax revenue goes to the consuming state rather than the producing state.

7. Rate Slabs: Standard GST slabs are \[ 0\%, \; 5\%, \; 12\%, \; 18\%, \] and \[ 28\%, \] with special rates for gold ( \[ 3\% \] ) and rough precious stones ( \[ 0.25\% \] ).

8. Key Benefits: Simplifies taxation and removes cascading effects for traders, lowers costs for consumers, and streamlines collection for the government.

1. GST: one destination-based indirect tax, launched 1 July 2017. It replaced older taxes such as VAT and excise.
   

2. Goods: movable property, excluding money and securities.
   

3. Services: activities such as banking and insurance.
   

4. Dual GST: levied by both the Centre (CGST) and the State (SGST).

5. Slabs : \[ 0\%, \; 5\%, \; 12\%, \; 18\%, \; 28\%, \] plus special rates of \[ 3\% \] (gold) and \[ 0.25\% \] (rough stones).

6. Benefits: no tax-on-tax (cascading), more transparency, and uniform rates: "One Nation, One Tax".

7. Registration: required above \[ \text{₹}20 \text{ lakh} \] turnover ( \[ \text{₹}10 \text{ lakh} \] in special-category states).

8. Outside GST: petroleum, alcohol, stamp duty, customs duty.