The Goods and Services Tax (GST) was introduced in India to remove the multiplicity of taxes levied, thereby reducing the complexity and tax cascading. The GSTsubsumed all previous taxes that were levied on the sale of goods or provision of services by either Central or State Government. Subsumation of large number of taxes and other levies will now allow free flow of larger pool of tax credits at both Central and State level.
Following taxes would be subsumed under GST:
1) Central taxes: Taxes currently levied and collected by the Centre:
a. Central Excise duty
b. Duties of Excise (Medicinal and Toilet Preparations)
c. Additional Duties of Excise (Goods of Special Importance)
d. Additional Duties of Excise (Textiles and Textile Products)
e. Additional Duties of Customs (commonly known as CVD)
f. Special Additional Duty of Customs (SAD)
g. Service Tax
h. Central Surcharges and Cesses so far as they relate to supply of go ..
2) State taxes: State taxes that are subsumed under the GST are:
a. State VAT
b. Central Sales Tax
c. Luxury Tax
d. Entry Tax (all forms)
e. Entertainment and Amusement Tax (except when levied by the local bodies)
f. Taxes on advertisements
g. Purchase Tax
h. Taxes on lotteries, betting and gambling
i. State Surcharges and Cesses so far as they relate to supply of goods and services.