7th September 2021

Taxes are contributions made for the country by the citizens that come back to the citizens - directly or indirectly in the form of services provided to us by the government. Before 1st July 2017, there were two types of Taxes:

1. Direct Tax: Paid by an individual or an organization directly to the government based on their ability to pay (based on their earnings). Ex: Income tax, Property tax, etc.
2. Indirect Tax: Paid by all of us every time we use any goods/ services like food, hotels, flights, etc. Mostly involves a retailer or a middleman. Ex: VAT, Customs duty, Excise duty, Entertainment tax, etc.

The indirect taxes were non-uniform and state-dependent. Hence, GST or Goods and Services Tax was introduced in place of it.

• It provides a uniform tax structure and avoids the cascading effect of taxes.
• The tax will be implemented at every step of value creation. (Pay only the net amount, not gross - see example at 4:30 here)

Types/ Components of GST

1. CGST or Central Goods and Services tax
2. SGST or States Goods and Services tax
3. IGST or Integrated Goods and Services tax
4. UGST or Union Territories Goods and Services tax

All types of GST explained

Who registers for GST?

Mandatory for:

1. Businesses > INR 20~40L turnover
2. All online sellers