How will GST work in practice?

The GST will follow a similar model with the one before it:

CGST and SGST will be applied to all transactions, with the exception of exempted goods and transactions below the agreed threshold limit.

CGST and SGST are going to be paid separately, to the Central and State accounts. As for tax returns, these will be filed with the appropriate CGST and SGST authorities.

Dealers and manufacturers who pay CGST or SGST will be given input tax credits (ITC), meaning they receive credit for the taxes they paid on their purchases. The credits of the CGST can only be used for the CGST paid. The same is applied in the case of SGST.

Taxpayers will receive a unique identification number which will be linked to their PAN cards and will be used to facilitate exchanges of income tax information and business tax compliance.

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