List of Taxes Included in GST, List of Indirect Taxes Subsumed in GST

List of Taxes Included in GST: Do you know which existing taxes are continuing and getting subsumed in GST era?. Goods and Services Tax (GST), India’s biggest tax reform, is launched at midnight by Prime Minister Narendra Modi at Parliament’s historic Central Hall, in the presence of President Pranab Mukherjee on 1st July 2017. It is the fourth time since Independence that an event will be held there at midnight. The last three celebrated India’s Independence. GST, which replaces various indirect taxes with a unified tax, is set to dramatically reshape the country’s 2 trillion dollar economy

Benefits of GST (List of Indirect Taxes): Check Complete of Indirect Taxes Included and Excluded in GST. Introduction of Goods and Services Tax (GST) will indeed be an important perfection and the next logical step towards a widespread indirect tax reforms in India. GST Scheme was supposed to be implemented from 1st July 2017 but this deadline seems difficult to be met as the Constitutional Amendment Bill has been stuck in Rajya Sabha. However, the department has said that the GST can be implemented anytime in 2017 once the Bill is passed. GST implementation will lead to immense scope, opportunities and challenges for the chartered accountant professionals having expert knowledge in the subject. This article seeks to provide a quick and sound understanding of List of Taxes Included in GST and Benefits of GST

Advent of GST is bringing drastic changes in the indirect tax structure. Although GST is propagated as single indirect tax, it will be major indirect tax and other indirect tax will remain intact. Professional need to understand which taxes are getting subsumed and which taxes will remain post GST

List of Taxes Included in GST and Benefits of GST

List of Taxes Included in GST

Taxes which will get added:

  1. Central Tax – earliest GST Model Law specified as CGST
  2. State Tax- earliest GST Model Law specified as SGST
  3. Integrated Tax- earliest GST Model Law specified as IGST
  4. Union Territory Tax- earliest GST Model Law specified as UTGST
  5. GST Compensation Cess

Indirect Taxes That Will Be Included Under GST

Following taxes will be subsumed in Goods & Services Tax as mentioned above :

State taxes which will be subsumed in SGST

  • VAT/Sales tax
  • Entertainment tax (unless it is levied by local bodies)
  • Luxury tax
  • Taxes on lottery, betting and gambling
  • State cess and surcharges to the extent related to supply of goods and services.
  • Entry tax not on in lieu of octroi
  • Electricity Duty

Central taxes which will be subsumed in CGST:

  1. Central Excise : Central Excise Act, 1944 except as respects goods included in entry 84 (Alcohol for human consumption)of the Union List of the Seventh Schedule to the Constitution and Central Excise on Petroleum Products
  2. Services Tax under Finance Act, 1994
  3. Central Sales Tax – CST
  4. Value Added Tax – VAT
  5. Additional duty of customs -CVD Additional duty of customs equal to the, excise duty leviable on like goods produced or manufactured in India. This is levied under Section 3 of Customs Tariff Act, 1975
  6. Special Additional duty – SAD Imported goods are also liable to a Special additional duty at a rate specified in Section 3A of the Customs Tariff Act, 1975.
  7. Education Cess under Finance Act – EC
  8. Higher Secondary education Cess under Finance Act – SHEC
  9. Swachha Bharat Cess – SBC
  10. Krishi Kalyan Cess – KKC
  11. Cess collected by Central Govt under various heads like Automobile Cess, Tractor Cess, Textile Cessetc
  12. Medicinal Excise
  13. Entry Tax on Goods Under Entry of Goods into Local Areas Act
  14. Entry Tax on Motor Vehicles Under Entry Tax of Motor Vehicles into Local Areas Act
  15. Purchase Tax
  16. Taxes on Lottery Betting gambling Under Betting Tax Act of respective State
  17. Luxury Tax Under Luxuries Act of respective States
  18. Entertainment Tax Under Entertainment tax Act of respective States
  19. State Cess / surchages
  20. LBT – Local Body Tax
  21. Octroi
  22. Tax on sale of Forest Produce by Government or Forest Development Corporation.

List of Taxes Not Included in GST

Taxes That May or May Not Be Subsumed Due To No Consensus Between The Central And The State Governments and various other reasons

  1. Basic Customs Duty – BCD
  2. Surcharge on Customs duty Surcharge at the rate of 10% of the Basic Customs Duty is levied on imported goods under Section 90 of the Finance Act, 2000 (unless exempted by a notification).
  3. Customs Cess –
  4. Safeguard duty under Section 8B of the Customs Tariff Act, 1975
  5. Anti-dumping duty under Section 9A, Customs Tariff Act 1975
  6. State Excise
  7. Stamp Duty
  8. Property Tax levied by Local Bodies
  9. Central Excise as respects goods included in entry 84 (Alcohol for human consumption) of the Union List of the Seventh Schedule to the Constitution
  10. Central Excise on Petroleum Products – GST applicability date on petroleum products will be notified subsequently
  11. VAT on Petroleum Products – GST applicability date on petroleum products (i.e. petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel) will be notified subsequently
  12. Profession Tax
  13. License fee on entry of vehicles under THE CANTONMENTS ACT, 2006
  14. Securities Transaction Tax (STT)

Benefits of GST

GST has been envisaged as a more efficient tax system, neutral in its application and attractive in distribution. The advantages of GST are:

  • Wider tax base, necessary for lowering the tax rates and eliminating classification disputes
  • Elimination of multiplicity of taxes and their cascading effects
  • Rationalization of tax structure and simplification of compliance procedures
  • Harmonization of center and State tax administrations, which would reduce duplication and compliance costs
  • Automation of compliance procedures to reduce errors and increase efficiency
Benefits To Trade Benefits To Consumers
Reduction in multiplicity of taxes Simpler Tax system
Mitigation of cascading/ double taxation Reduction in prices of goods & services due to elimination of cascading
More efficient neutralization of taxes especially for exports Uniform prices throughout the country
Development of common national market Transparency in taxation system  Increase in
Simpler tax regime (1.Fewer rates and exemptions, 2. Distinction between Goods & Services no longer required Increase in employment opportunities

Reduces transaction costs and unnecessary wastages: A single registration and a single compliance will suffice for both SGST and CGST provided government produces effective IT infrastructure and integration of states level with the union.

Eliminates the multiplicity of taxation: The reduction in the number of taxation applicable in a chain of transaction will help to reduce the paper work and clean up the current mess that is brought by existing indirect taxation laws.

One point single tax: There would be focus on business rather than worrying about their taxation that may crop at later stages. This will help the business community to decide their supply chain, pricing modalities and in the long run helps the consumers being goods competitive as price will no longer be the function of tax components but function of sheer business intelligence and innovation.

Reduces average tax burdens: The cost of tax that consumers have to bear will be certain and it is expected that GST would reduce the average tax burdens on the consumers.

Reduces the corruption: As the number of taxes reduces so does the number of visits to multiple departments reduces and hence, the reduction in corruption.

In all cases except a few products and States, there would be uniformity of tax rates across the States.

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