What is Fundamental GST Objective

Posted on 10 June 2022 Category : GST terms

Fundamental GST Objective Means

Fundamental GST Objective:

This post explains about Fundamental GST Objective.

GST is based on the principle of value added tax and either “input tax method” or “subtraction” method, with emphasis on voluntary compliance and accounts based system.

i. It is a comprehensive levy and collection on both goods and services at the same rate with benefit of input tax credit or subtraction of value of penultimate transaction value.

ii. Minimum number of floor rates of tax, generally, not exceeding two rates.

iii. No scope for levy of cess, re-sale tax, additional tax, special tax, turnover tax etc.

iv. No scope for multiple levy of tax on goods and services, such as, sales tax, entry tax, octroi, entertainment tax, luxury tax, etc.

v. Zero rating of exports and inter State sales of goods and supply of services.

vi. Taxing of capital goods and inputs whether goods or services relatable to manufacture at lower rate, so as to reduce inventory carrying cost and cost of production.

vii. A common law and procedures throughout the country under a single administration.

viii. GST is a destination based tax and levied at single point at the time of consumption of goods or services by the ultimate consumer.

This post describes about Fundamental GST Objective. Comment below your thoughts about this post Fundamental GST Objective.

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