GST stands for "Goods and Services Tax." GST is proposed to be a comprehensive indirect tax levy on manufacture, sale, and consumption of goods as well as services at the national level.
The main logic behind implementing GST was to consolidate all indirect tax levies into a single tax, except customs replacing multiple tax levies, overcoming the limitations of existing indirect tax structure, and creating efficiencies in tax administration.
In GST only value addition will be taxed, and burden of the tax is to be borne by the final consumer.
Know which of the taxes are subsumed under GST
The GST is replacing the following taxes:
1. Taxes currently levied and collected by the Centre
a. Central Excise duty
b. Duties of Excise (Medicinal and Toilet
c. Additional Duties of Excise (Goods of Special
d. Additional Duties of Excise (Textiles and Textile
e. Additional Duties of Customs (commonly known as
f. Special Additional Duty of Customs (SAD)
g. Service Tax
h. Central Surcharges and Cesses so far as they
relate to supply of goods and services.
2. State taxes that would be subsumed under the GST are:
a. State VAT
b. Central Sales Tax
c. Luxury Tax
d. Entry Tax (all forms)
e. Entertainment and Amusement Tax (except when
levied by the local bodies)
f. Taxes on advertisements
g. Purchase Tax
h. Taxes on lotteries, betting and gambling
i. State Surcharges and Cesses so far as they relate to
supply of goods and services.
GST has eliminated all the above-mentioned taxes. After July 1 excise, octroi, sales tax, CENVAT, Service tax, turnover tax, etc. are not applicable. Now all these taxes fall under GST.