Goods and services tax ( India ) - Wikipedia Goods and services tax ( India ) This article is about the tax. For legislation, see One Hundred and First Amendment of the Constitution of India. This article may be in need of reorganization to comply with Wikipedia 's layout guidelines. Please help by editing the article to make improvements to the overall structure. ( June 2017 ) Goods and Services Tax ( GST ) is an indirect tax levied in India on the sale of goods and services. Goods and services are divided into five tax slabs for collection of tax - 0 %, 5 %, 12 %, 18 % and 28 %. Petroleum products and alcoholic drinks are taxed separately by the individual state governments. There is a special rate of 0.25 % on rough precious and semi-precious stones and 3 % on gold. In addition a cess of 22 % or other rates on top of 28 % GST applies on few items like aerated drinks, luxury cars and tobacco products. The tax came into effect from July 1, 2017 through the implementation of One Hundred and First Amendment of the Constitution of India by the Government of India. The tax replaced existing multiple cascading taxes levied by the central and state governments. The tax rates, rules and regulations are governed by the Goods and Services Tax Council which comprises finance ministers of centre and all the states. GST simplified a slew of indirect taxes with a unified tax and is therefore expected to dramatically reshape the country 's 2 trillion dollar economy. Contents 1 Formation 1.1 Launch 2 Taxation scheme 2.1 Taxes subsumed 2.2 HSN code in GST 2.3 Rates 3 Goods and Services Tax Network ( GSTN ) 4 E-Way Bill 4.1 USE 4.2 MODES OF GENERATION 4.3 Contents, validity of e-Way Bill 5 See also 6 References 7 External links Formation This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. ( June 2017 ) The reform process of India 's indirect tax regime was started in 1986 by Vishwanath Pratap Singh, Finance Minister in Rajiv Gandhi 's government, with the introduction of the Modified Value Added Tax ( MODVAT ). Subsequently, the then Prime Minister PV Narasimha Rao and his Finance Minister Manmohan Singh, initiated early discussions on a Value Added Tax at the state level. A single common `` Goods and Services Tax ( GST ) '' was proposed and given a go - ahead in 1999 during a meeting between the Prime Minister Atal Bihari Vajpayee and his economic advisory panel, which included three former RBI governors IG Patel, Bimal Jalan and C Rangarajan. Vajpayee set up a committee headed by the finance minister of West Bengal, Asim Dasgupta to design a GST model. The Ravi Dasgupta committee was also tasked with putting in place the back - end technology and logistics ( later came to be known as the GST Network, or GSTN, in 2017 ) for rolling out a uniform taxation regime in the country. In 2002, the Vajpayee government formed a task force under Vijay Kelkar to recommend tax reforms. In 2005, the Kelkar committee recommended rolling out GST as suggested by the 12th Finance Commission. After the fall of the BJP - led NDA government in 2004, and the election of a Congress - led UPA government, the new Finance Minister P Chidambaram in February 2006 continued work on the same and proposed a GST rollout by 1 April 2010. However, in 2010, with the Trinamool Congress routing CPI ( M ) out of power in West Bengal, Asim Dasgupta resigned as the head of the GST committee. Dasgupta admitted in an interview that 80 % of the task had been done. In 2014, the NDA government was elected into power, this time under the leadership of Narendra Modi. With the consequential dissolution of the 15th Lok Sabha, the GST Bill -- approved by the standing committee for reintroduction -- lapsed. Seven months after the formation of the Modi government, the new Finance Minister Arun Jaitley introduced the GST Bill in the Lok Sabha, where the BJP had a majority. In February 2015, Jaitley set another deadline of 1 April 2017 to implement GST. In May 2016, the Lok Sabha passed the Constitution Amendment Bill, paving way for GST. However, the Opposition, led by the Congress, demanded that the GST Bill be again sent back to the Select Committee of the Rajya Sabha due to disagreements on several statements in the Bill relating to taxation. Finally in August 2016, the Amendment Bill was passed. Over the next 15 to 20 days, 18 states ratified the GST Bill and the President Pranab Mukherjee gave his assent to it. A 22 - members select committee was formed to look into the proposed GST laws. State and Union Territory GST laws were passed by all the states and Union Territories of India except Jammu & Kashmir, paving the way for smooth rollout of the tax from 1 July 2017. the Jammu and Kashmir state legislature passed its GST act on 7 July 2017, thereby ensuring that the entire nation is brought under an unified indirect taxation system. There was to be no GST on the sale and purchase of securities. That continues to be governed by Securities Transaction Tax ( STT ). Launch The Goods and Services Tax was launched at midnight on 1 July 2017 by the former President of India, Pranab Mukherjee, and Prime Minister of India, Narendra Modi. The launch was marked by a historic midnight ( 30 June -- 1 July ) session of both the houses of parliament convened at the Central Hall of the Parliament. Though the session was attended by high - profile guests from the business and the entertainment industry including Ratan Tata, it was boycotted by the opposition due to the predicted problems that it was bound to lead to for the middle and lower class Indians. It is one of the few midnight sessions that have been held by the parliament - the others being the declaration of India 's independence on 15 August 1947, and the silver and golden jubilees of that occasion. After its launch, the GST rates have been modified multiple times, the latest being on 18 January 2018, where a panel of federal and state finance ministers decided to revise GST rates on 29 goods and 53 services. Members of the Congress boycotted the GST launch altogether. They were joined by members of the Trinamool Congress, Communist Parties of India and the DMK. The parties reported that they found virtually no difference between the GST and the existing taxation system, claiming that the government was trying to merely rebrand the current taxation system. They also argued that the GST would increase existing rates on common daily goods while reducing rates on luxury items, and affect many Indians adversely, especially the middle, lower middle and poorer classes. The GST model of India has been modeled on the taxation system of France. Taxation scheme Taxes subsumed The single GST ( goods and service taxes ) replaced several former taxes and levies which included : central excise duty, services tax, additional customs duty, surcharges, state - level value added tax and Octroi. Other levies which were applicable on inter-state transportation of goods have also been done away with in GST regime. GST is levied on all transactions such as sale, transfer, purchase, barter, lease, or import of goods and / or services. India adopted a dual GST model, meaning that taxation is administered by both the Union and State Governments. Transactions made within a single state are levied with Central GST ( CGST ) by the Central Government and State GST ( SGST ) by the State governments. For inter-state transactions and imported goods or services, an Integrated GST ( IGST ) is levied by the Central Government. GST is a consumption - based tax / destination - based tax, therefore, taxes are paid to the state where the goods or services are consumed not the state in which they were produced. IGST complicates tax collection for State Governments by disabling them from collecting the tax owed to them directly from the Central Government. Under the previous system, a state would only have to deal with a single government in order to collect tax revenue. HSN code in GST HSN ( Harmonized System of Nomenclature ) is an 8 - digit code for identifying the applicable rate of GST on different products as per CGST rules. If a company has turnover up to RS. 1.5 Crore in the preceding financial year then they need not mention the HSN code while supplying goods on invoices. If a company has turnover more than 1.5 Cr but up to 5 Cr then they need to mention the 2 digit HSN code while supplying goods on invoices. If turnover crosses 5 Cr then they shall mention the 4 digit HSN code on invoices. Rates The GST is imposed at variable rates on variable items. The rate of GST is 2.5 % for soaps and 28 % on washing detergents. GST on movie tickets is based on slabs, with 18 % GST for tickets that cost less than Rs. 100 and 28 % GST on tickets costing more than Rs. 100 and 5 % on readymade clothes. The rate on under - construction property booking is 12 %. Some industries and products were exempted by the government and remain untaxed under GST, such as dairy products, products of milling industries, fresh vegetables & fruits, meat products, and other groceries and necessities. Checkposts across the country were abolished ensuring free and fast movement of goods. The Central Government had proposed to insulate the revenues of the States from the impact of GST, with the expectation that in due course, GST will be levied on petroleum and petroleum products. The central government had assured states of compensation for any revenue loss incurred by them from the date of GST for a period of five years. However, no concrete laws have yet been made to support such action. GST council adopted concept paper discouraging tinkering with rates. Goods and services tax Network ( GSTN ) This section needs to be updated. Please update this article to reflect recent events or newly available information. ( June 2017 ) As per the government website on GST, `` Goods and Services Tax '' Network ( GSTN ) is a nonprofit organisation proposed to be formed for creating a website / platform for all the concerned parties related to the GST, namely stakeholders, government and taxpayers to collaborate on a single portal. When up and running, the portal is supposed to be accessible to the central government which allows it to track down every transaction on its end while taxpayers are advertised to have the ability of connecting this to their tax returns. However its efficacy and efficiency is yet to be tested. According to GSTN, the organisation 's authorised capital is ₹ 10 crore ( US $1.6 million ) in which Central Government holds 24.5 percent of shares while the state government holds 24.5 percent. The remaining 51 percent are held by non-Government financial institutions. E-Way Bill An E-Way Bill, a GSTN project under the Goods and Services Tax, is required to be generated for every inter-state movement of goods beyond 10 kilometres ( 6.2 mi ) and the threshold limit of ₹ 50,000 ( US $780 ). Use e-Way Bill is mandatory for Inter-State movement of goods of consignment value exceeding Rs. 50,000 / - in motorized conveyance. Registered GST Taxpayers can register in the e-Way Bill Portal using GSTIN. Unregistered Persons / Transporters can enroll in the e-Way Bill System by providing their PAN and Aadhaar. Supplier / Recipient / Transporter can generate the e-Way Bill. Vehicle number can be entered / updated in PART - B of Form EWB - 01 by those who have generated the e-Way Bill or by the Transporter. QR code is provided in the e-Way Bill to facilitate quick verification. Certain goods have been exempted from e-Way Bill and the list is available as Annexure to Rule 138 of CGST Rules. e-Way Bill is not required for transport through non-motorized conveyance. Modes of generation Various Modes of Generating e-Way Bill a ) Web ( Online ) b ) Android App - The IMEI of the phone and the registered mobile number has to be given. c ) SMS based ( through registered Mobile Number ). d ) Excel based upload is provided for bulk generation. If the e-Way Bill is generated with wrong information it can be cancelled and new e-Way Bill can be generated. Provision for Cancellation of e-Way Bill within 24 hours by the person who have generated the e-Way Bill. The Recipient can reject the e-Way Bill within 72 hours of generation. Alert messages are also issued to the Users through Online and SMS. Contents, validity of e-Way Bill Contents of PART - A of the Form EWB - 01 ca n't be edited or modified once generated. PART - B can be updated with Vehicle details / RR / Airway Bill etc. Consolidated e-Way Bill can be generated for vehicle carrying multiple consignments. The Validity of e-Way Bill is fixed as one day for every 100 km or part thereof. The validity can be extended online before the expiry. The e-Way Bill with consignment should have the latest vehicle number which is carrying the said consignment. The Users can create their own masters like the list of Customers, Suppliers, Products, and HSN etc. For detailed User Manual, FAQs, CBT, and Legal Provision on e-Way Bill. See also Goods and Services Tax ( Australia ) Goods and Services Tax ( Canada ) Goods and Services Tax ( Singapore ) Goods and Services Tax ( Hong Kong ) Goods and Services Tax ( Malaysia ) References Jump up ^ `` All your queries on GST answered ''. The Hindu. Retrieved 2017 - 06 - 30. Jump up ^ `` GST : Cars, durables face 28 % rate ; luxury vehicles to attract 15 % cess '', Business Standard, 18 May 2017 Jump up ^ `` Film theatres in Tamil Nadu to begin indefinite strike against GST ''. The Hindu. 2 July 2017. Retrieved 3 July 2017. Jump up ^ `` Looking back at GST 's journey : How an idea is now near reality '', Indian Express, 31 March 2017 ^ Jump up to : `` GST : A 17 - year - old dream, 17 phases towards creating history '', India Today, 29 June 2017 Jump up ^ `` Goods and Services Tax : History of India 's biggest tax reform and people who made it possible '', India TV, 29 Jun 2017 Jump up ^ `` GST : Meet the men behind India 's biggest tax reform that 's been in making for 17 years '', India Today, June 29, 2017 Jump up ^ Nair, Remya ( 8 June 2015 ), `` Rajya Sabha panel to hear GST concerns on 16 June '', Live Mint Jump up ^ `` GST rollout : All except J-K pass State GST legislation '', The Indian Express, 22 June 2017 Jump up ^ `` GST draft makes it must for companies to pass tax benefit to consumers '', The Times of India, 27 November 2016 Jump up ^ `` GST Rollout Attendees '', Financial Express, June 30, 2017 ^ Jump up to : `` GST launch : Times when the Parliament convened for a session at midnight '', The Hindustan Times, 30 June 2017 Jump up ^ `` Latest GST Cuts : Complete List Of What Just Got Cheaper '', NDTV Jump up ^ PTI ( 2017 - 06 - 30 ). `` GST launch divides opposition ''. livemint.com/. Retrieved 2018 - 01 - 22. Jump up ^ `` Congress To Boycott GST Launch, Arun Jaitley Suggests Broader Shoulders '', NDTV, 29 June 2017 Jump up ^ `` What is GST, how is it different from now : Decoding the indirect tax regime '', Business Standard, 17 April 2017 Jump up ^ `` GST may swallow all taxes but cess '', Business Standard, 20 September 2016 Jump up ^ `` On Notes Ban, Firm Warning From West Bengal To Centre : GST Now At Risk '', NDTV, 30 November 2016 Jump up ^ `` Finance minister Arun Jaitley may hike service tax to 16 - 18 % in Budget '', The Times of India, 30 January 2017 Jump up ^ `` GST : The illustrative guide to how transactions will take place after tax reform ''. Money Control. Jump up ^ `` Understanding HSN Codes Under GST ''. Masters India. Jump up ^ Mehra, Puja ( 27 June 2017 ). `` GST, an old new tax ''. The Hindu - Opinion. Retrieved 3 July 2017. Jump up ^ `` What is the GST impact on real estate ? '', The Indian Express, 5 July 2017 Jump up ^ `` GST rollout : List of items exempted from taxation ''. The Indian Express. 2017 - 06 - 30. Retrieved 2017 - 07 - 30. Jump up ^ `` 22 states scrap checkposts for smooth GST rollout '', The Times of India, 4 July 2017 Jump up ^ `` ' States on Board, GST Launch from April ' 16 ' ''. newindianexpress.com. Jump up ^ Sikarwar, Deepshikha ( 2017 - 10 - 09 ). `` GST council adopts concept paper discouraging tinkering with rates ''. The Economic Times. Retrieved 2017 - 10 - 09. Jump up ^ `` About Us -- GSTN ''. www.gstn.org. Retrieved 2018 - 02 - 06. Jump up ^ `` Businesses, govt gear up for E-Way Bill '', The Hindu Business Line, 25 January 2018 External links Official website CBEC GST Law GST Council Economy of India Companies BSE SENSEX CNX Nifty Government - owned companies List of companies Governance Ministry of Finance Finance ministers Ministry of Commerce and Industry Commerce ministers Finance Commission Economic Advisory Council Central Statistical Office Securities and Exchange Board of India Enforcement Directorate Foreign trade Foreign direct investment Foreign exchange reserves Remittances Taxation Subsidies Industrial licensing Voluntary guidelines NITI Aayog Make in India Currency Indian rupee History Historical exchange rates Coinage Reserve Bank of India Governors India Government Mint Financial services Banking Banks Insurance Bombay Stock Exchange National Stock Exchange Multi Commodity Exchange Bullion Black money Stock exchanges History Economic development Economic liberalisation Licence Raj Green revolution Government initiatives Numbering system People Billionaires Businesspeople Demography Income Poverty Labour law Pensions EPFO NPS PPF States Andhra Pradesh Assam Bihar Delhi Goa Gujarat Haryana Himachal Pradesh Jammu and Kashmir Karnataka Kerala Madhya Pradesh Maharashtra Mizoram Odisha Punjab Rajasthan Tamil Nadu Telangana Uttarakhand Uttar Pradesh West Bengal Sectors Agriculture Livestock Fishing Automotive Defence Construction Education Energy Nuclear Solar Wind Entertainment Forestry Gambling Healthcare Information technology Media Cinema Television Printing Mining Coal Iron and Steel Pharmaceuticals Retail Science and technology Biotechnology Telecommunications Textiles Tourism Transport Aviation Civil Ports Rail Utilities Electricity Water Commons Wikiquotes Taxation in Asia Sovereign states Afghanistan Armenia Azerbaijan Bahrain Bangladesh Bhutan Brunei Cambodia China Cyprus East Timor ( Timor - Leste ) Egypt Georgia India Indonesia Iran Iraq Israel Japan Jordan Kazakhstan North Korea South Korea Kuwait Kyrgyzstan Laos Lebanon Malaysia Maldives Mongolia Myanmar Nepal Oman Pakistan Philippines Qatar Russia Saudi Arabia Singapore Sri Lanka Syria Tajikistan Thailand Turkey Turkmenistan United Arab Emirates Uzbekistan Vietnam Yemen States with limited recognition Abkhazia Artsakh Northern Cyprus Palestine South Ossetia Taiwan Dependencies and other territories British Indian Ocean Territory Christmas Island Cocos ( Keeling ) Islands Hong Kong Macau Taxation in India Taxes Central Excise Duty Goods and Services Tax Income tax in India Securities Transaction Tax Service Tax Value - added taxation Bodies CBDT Chairperson, Central Board of Direct Taxes Investigation Division of the Central Board of Direct Taxes Central Board of Excise and Customs Chairperson Central Board of Excise & Customs Income Tax Department Central Economic Intelligence Bureau Directorate of Revenue Intelligence Tax Administration Reform Commission Legislations Benami Transactions ( Prohibition ) Act, 1988 Expenditure Tax Act, 1987 Finance Act ( India ) The Finance Act, 2016 Gift Tax Act, 1958 Interest Tax Act, 1974 The Income - tax Act, 1961 Wealth Tax Act, 1957 Schemes Income declaration scheme, 2016 Pradhan Mantri Garib Kalyan Yojana Voluntary Disclosure of Income Scheme Retrieved from `` https://en.wikipedia.org/w/index.php?title=Goods_and_Services_Tax_(India)&oldid=825668260 '' Categories : 2017 in Indian economy 2017 in Indian politics Taxation in India Value added taxes Hidden categories : Use dmy dates from May 2017 Use Indian English from September 2016 All Wikipedia articles written in Indian English Wikipedia articles needing reorganization from June 2017 Articles needing additional references from June 2017 All articles needing additional references Wikipedia articles in need of updating from June 2017 All Wikipedia articles in need of updating Talk Contents About Wikipedia हिन्दी मैथिली मराठी தமிழ் తెలుగు Edit links This page was last edited on 14 February 2018, at 18 : 15. 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Question: what is the meaning of goods and service tax
Answer: indirect tax levied in India on the sale of goods and services