At present, the taxes levied by center and state are different. The center levies customs duties, excise duty, central sales tax and service tax. Whereas, the state levies VAT, luxury tax, electricity duty, entertainment tax, entry tax, and octroi.
India offers a well-structured tax system for its population. Taxes are the largest source of income for the government. This money is deployed for various purposes and projects for the development of the nation.
Taxes are determined by the Central and State Governments along with local authorities like municipal corporations. The government cannot impose any tax unless it is passed as a law.
The GST would replace the following taxes :
CGST replaces Central Excise Duty+Additional Excise Duty, Service Tax, Central Cesses & Surcharges on Goods & services, Additional & Special Additional Duty of Customs.
SGST replaces VAT, CST, CAD, SAD, Taxes on Lottery-Billing-Gambling, Entertainment Tax(except by local bodies), Purchase Tax and Luxury Tax.
TYPES OF TAXES:
Taxes are classified under two categories namely direct and indirect taxes. The largest difference between these taxes is their implementation. Direct taxes are paid by the assessee while indirect taxes are levied on goods and services
A) Direct Taxes: Direct taxes are levied on individuals and corporate entities and cannot be transferred to others. These include income tax, wealth tax, and gift tax.
B) Indirect Taxes: Direct taxes are levied on individuals and corporate entities and cannot be transferred to others. These include income tax, wealth tax, and gift tax.