PRE GST TAX STRUCTURE IN INDIA BAZILLA.docx - PRE GST TAX STRUCTURE IN INDIA Under the previous indirect tax regime both Centre and States levied and

PRE GST TAX STRUCTURE IN INDIA BAZILLA.docx - PRE GST TAX...

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PRE GST TAX STRUCTURE IN INDIA: Under the previous indirect tax regime, both Centre and States levied and collected taxes on goods and services separately. The tax collected at each level of authority was as per the respective subjects enumerated in the Union and State Lists. In respect of goods, the Centre had powers to levy tax on the manufacture of goods except alcohol for human consumption, narcotics etc. Whereas the State governments had powers to levy tax on the sale of goods. In respect of Services, only the Centre had the power to levy and collect Service Tax. Hence, Central Excise, Customs and Service Tax were the three main components of indirect taxes for the Central Government. While VAT and Central Sales Tax (CST) were the major taxes for the State Governments along with Octroi, Entertainment Tax etc. Such multiplicity of taxes gave way to multiple taxable events. In such a scenario, taxes were levied by different authorities on the same subject or transaction. Moreover, taxes paid on input goods could not be set off against the output tax payable on services or vice versa. Also, there
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