Taxes Subsumed and Not Subsumed Under GST in India

Direct tax is collected by the Central Government. Whereas Indirect Tax used to be collected by the Central and State governments & local bodies. For instance, taxes like Entry tax and VAT were charged by both the Central government and the State government. Similarly, other taxes like property tax, water tax, and toll tax were levied by the local bodies.

For better enforcement, tax payment, and ease of compliance, the government subsumed a large number of Indirect Taxes in GST. But Many of us think that with the commencement of GST in the nation, all the previous taxes have been replaced. On the other hand, there are still some taxes that are still charged independently. If you are also wondering which taxes have not been subsumed under GST, this guide will help you get the answer. This guide explores the taxes that have been subsumed under GST and those that have not been subsumed under GST.

What are the Different Components of GST?

The new taxation system GST has three different components -

Based on whether the transaction is inter-state (between two states) or intra-state (within the same state), there are three components of GST -

• CGST - It is collected by the Central government of India on the intra-state sale of goods
• SGST - It is collected by the state government on the intra-state sale of goods.
• IGST - The Central government of India collects IGST on interstate transactions.

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Central Taxes Replaced by GST-

• Additional duties of excise
• Central Excise Duty
• Excise duty levied under Medicinal & Toiletries Preparation Act
• Additional duties of Excise levied under Textiles & Textile Products
• Additional duties of Customs(CVD & SAD)
• Service Tax
• Surcharges & Cesses
• Central Sales tax

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State Taxes Replaced by GST

• State VAT/Sales Tax
• Central Sales Tax
• Purchase Tax
• Entertainment Tax(Other than those levied by local bodies)
• Luxury Tax
• Entry Tax(All Forms)
• Taxes on lottery, betting & gambling
• Surcharges & Cesses
• Taxes on advertisements

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Taxes Not Covered by GST

• Property Tax & Stamp Duty
• Electricity Duty
• Excise Duty on Alcohol
• Basic Custom Duty
• Petroleum crude, Diesel, Petrol, ATF & Natural Gas

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Benefits of GST

Here are the benefits of the introduction of a single taxation system, i.e., GST regime -

• The implementation of GST has significantly impacted the economy and boosted India's GDP. In the short term, GST has broadened the taxpayer base and simplified tax compliance for everyone. The all-online portal for GST filing has made the process easier and helped reduce tax fraud.
• By eliminating the cascading effect of taxes, GST has reduced the prices of goods and services over time.
• Small businesses registered under GST with a turnover of up to Rs. 75 lakhs can benefit from the composition scheme, paying only 1% tax on their annual turnover.
• GST is also aimed at curbing corruption related to sales without receipts, and it has reduced taxes on certain goods like cars and smartphones.

GSTs motto of “One Nation, One Tax” simplified the Indian taxation system by implementing a unified tax system. However, certain taxes are still charged independently and are not covered under the purview of GST. Hope this article helped you learn about which taxes are not subsumed in GST.

If you need help with GST registration and GST filing services, you can get in touch with our experts, who can help you register for GST and file your GST returns. Book a tax expert now!

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