GST Full Form is Goods and Services Tax. Before learning more about Goods and Service Tax, let’s try to understand how taxes in India work. The Government of any country needs money for its functioning and taxes are a major source of revenue for a Government. The taxes thus collected are spent by Govt. on the public. These taxes are broadly classified into two types: Direct Tax and Indirect Tax
- Direct Tax – Direct Tax is imposed on the income of an individual. The amount of tax payable varies on the income earned by the individual from various sources such as salary, house rent income, etc. So, the more you earn, the more tax you pay to the Government which essentially means the rich pay more tax in comparison to the poor.
- Indirect Tax – Indirect tax is not imposed directly on the income of individuals. Instead, it is imposed on goods and services which in turn increases the cost MRP) of Goods and Services. Unlike a direct tax, the indirect tax should be borne by the end customer, rich and poor alike., There are many indirect taxes. Some of these are levied by the Central Government whereas some are levied by the State Government making the indirect tax system an extremely complicated system.
GST has replaced almost 17 of the existing state and central indirect taxes (more to come in the future) such as central excise duty, additional customs duty, VAT, entertainment tax, service tax, etc. It is called Goods and Services Tax because it is applicable to the supply of both Goods and Services. Click for understanding GST with a simple example.
Why was GST introduced in India?
Prior to the introduction of GST in India, the Value Added Tax regime was in force in India. It suffered from many deficiencies such as
- A separate charge of several local levies in State VAT such as entertainment tax, luxury tax, etc.
- Double taxation on account of Non-VATable CST and inclusion of CENVAT in the value on which VAT was imposed.
- Nonintegration of VAT & Service tax.
- Double taxation of a single transaction both as a good and service.
Know GST in your Language
|S No||Language||GST full form in Various Languages|
|1||GST full form in Hindi||वस्तु एवं सेवा कर|
|2||GST full form in Marathi||वस्तू आणि सेवा कर|
|3||GST full form in Gujrati||માલ અને સેવાઓ કર|
|4||GST full form in Punjabi||ਗੁਡਸ ਅਤੇ ਸਰਵਿਸਿਜ਼ ਟੈਕਸ|
|5||GST full form in Malayalam||വസ്തുക്കളും സേവന നികുതിയും|
|6||GST full form in Bengali||পণ্য ও সেবা কর|
|7||GST full form in Kannad||ಸರಕು ಮತ್ತು ಸೇವೆಗಳ ತೆರಿಗೆ|
|8||GST full form in Telegu||వస్తువులు మరియు సేవ పన్ను|
|9||GST full form in Tamil||பொருட்கள் மற்றும் சேவைகள் வரி|
|10||GST full form in Sindhi||سامان ۽ خدمت ٽيڪس|
|11||GST full form in Urdu||سامان اور سروس ٹیکس|
|12||GST full form in Nepali||सामान र सेवा कर|
|13||GST full form in Arabic||ضريبة السلع والخدمات|