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  • Jun 03, 2019
    Taxes are of two types. Direct tax is the tax that you pay directly pay to the Government like Income Tax and Indirect Tax is the tax you pay indirectly to the Government on the purchase of any good or commodities for example VAT and service tax. Goods and Services Tax (GST) is an indirect tax that is levied upon goods and services bought by customers. It has been replaced by all the other types of indirect taxes and eliminates their need. This one single indirect tax not only makes it convenient for the government to collect tax, but also makes it convenient for the tax payer. It also ensures much better transparency and therefore reduces the scope and opportunities for corruption. GST can also be classified as Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST).   GST Slab rates are given as follows: 0% rate: Food grains used by common people. 5% Rate: Items of mass consumption including essential commodities will have low tax incidence. 12% and 18 % Rate:  Two standard rates had been finalized as 12% and 18%. 28% Rate : White goods like Air conditioners, washing machines, refrigerators, soaps and shampoos etc. that were taxed at 30-31% are now taxed at 28%. Demerit goods like tobacco, tobacco products, pan masala, aerated drinks and luxury cars shall be charged at the highest rate of 28%. An additional cess on some luxury goods shall also be imposed.  Services that were earlier taxed at 15% are taxed at a higher rate of GST at 18%.
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