Under Erstwhile indirect tax laws, Goods were taxed at multiple levels starting from Manufacturing to End Consumption. Excise Duty, VAT, Entry Tax & Octroi are the major types of taxes levied on goods. Post implementation of Goods & Service Tax w.e.f. 01st July 2017 there is a paradigm shift in taxes levied on goods in India from multiple taxes to the single tax system. GST shall be levied on every taxable supply made by a taxable person in the taxable territory.
There can be two types of supplies either Inter-state or Intra-state. In case of Interstate supply of goods, IGST shall be levied while for the Intra-state supply of goods CGST & SGST shall be levied. In order to determine that whether the supply is Inter-state or Intra-state, we have to check the place of supply provisions applicable to the respectively supply of goods. If Place of supply and Location of the supplier is in the same state then the supply shall be Intra-state supply, whereas, if Place of supply and Location of the supplier is in a different state or UT then it will be considered as Inter-state supply.
All types of goods have been segregated in 4 tax rate categories of GST (5%, 12%, 18%, 28%) based on the internationally accepted HSN Code classification. These rates shall remain same throughout India and there are certain items like Tobacco products or Cars on which, cess at a fixed % of GST amount shall also be levied.
There are few items which are not covered under GST i.e. Petroleum Products, Alcoholic Beverages and Electricity. On these items Excise, VAT & Other cess shall be charged and no credit shall be available of taxes paid on these items against GST liability.