GST: One Nation, One Tax, One Market
Goods and Service Tax (GST) is the single comprehensive indirect tax, operational from 1 July 2017, on supply of goods and services, right from the manufacturer/ service provider to the consumer. It is a destination based consumption tax with facility of Input Tax Credit in the supply chain. It is applicable throughout the country with one rate for one type of goods/service.
It has amalgamated a large number of Central and State taxes and cesses. It has replaced large number of taxes on goods and services levied on production/ sale of goods or provision of service. As there have been a number of intermediate goods/services, which were manufactured/provided in the economy, the pre GST tax regime imposed taxes not on the value added at each stage but on were manufactured/provided in the economy, the pre GST tax regime imposed taxes not on the value added at each stage but the total value of the commodity/service with minimal facility of utilisation of Input Tax Credit (ITC). The total value included taxes paid on intermediate goods/services.
This amounted to cascading of tax. Under GST, the tax is discharged at every stage of supply and the credit of tax paid at the previous stage is available for set off at the next stage of supply of goods and/or services. It is thus effectively a tax on value addition at each stage of supply. In view of our large and fast growing economy, it addresses to establish parity in taxation across the country, and extend principles of 'value- added taxation' to all goods and services. It has replaced various types of taxes/cesses, levied by the Central and State/UT Governments.
Some of the major taxes that were levied by Centre were Central Excise Duty, Service Tax, Central Sales Tax, Cesses like KKC and SBC. The major State taxes were VAT/Sales Tax, Entry Tax, Luxury Tax, Octroi, Entertainment Tax, Taxes on Advertisements, Taxes on Lottery /Betting/ Gambling, State Cesses on goods etc. These have been subsumed in GST.
Q) From the following which product has been kept out from the GST ambit?
Correct Answer :
Tobacco.
Solution :
Correct Answer: Tobacco.
Explanation:
The Goods and Services Tax (GST) is a comprehensive indirect tax introduced to subsume a majority of central and state indirect taxes, creating a unified market. Under the GST regime, most goods and services are subject to a single rate of tax at each stage of supply with the facility of Input Tax Credit (ITC).
However, certain products are treated differently under the law:
1. Tobacco and Tobacco Products: Tobacco is unique because it is subject to GST, but the Central Government also retains the constitutional power to levy an additional Central Excise Duty on it. This dual taxation mechanism is meant to discourage the consumption of sin goods while allowing the government to raise additional revenue. Therefore, in the context of the given options, Tobacco holds a distinct status compared to standard items like Gold, Silver, and Luxury Consumables, which are fully integrated within the normal GST slabs without an independent central excise duty layer.
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