The Goods and Services Tax, which came into effect on July 1, 2017, is an indirect tax levied on the supply of goods and services across the country. Simply put, it is one uniform indirect tax for the entire country. A comprehensive tax, it has done away with cascading taxes and consolidated Central and State levies. Under the GST, the customer is in a position to source from any supplier and the latter is in a position to access markets across the country.
GST would be levied on the basis of the destination principle. Exports would be zero-rated, and imports would attract tax in the same manner as domestic goods and services. In addition to the IGST in respect of supply of goods, an additional tax of up to 1% has been proposed to be levied by the central government. The revenue from this tax is to be assigned to the origin states. This tax is proposed to be levied for the first two years or a longer period, as recommended by the GST Council.
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