Goods and Services Tax (GST) is a unified indirect tax system introduced to simplify India’s complex taxation structure. It replaced multiple indirect taxes such as VAT, service tax, excise duty, and others, bringing them under a single framework.
GST is divided into three main components: CGST (Central GST), SGST (State GST), and IGST (Integrated GST). This structure ensures a smooth flow of tax credit across the supply chain while maintaining transparency and accountability.
For businesses, GST compliance involves timely registration, accurate invoicing, regular return filing, and proper reconciliation of input tax credit. While the compliance process may seem complex initially, it significantly reduces tax cascading and improves ease of doing business in the long run.
Understanding GST is essential for businesses to remain compliant, avoid penalties, and optimize their tax planning strategies.