Taxes subsumed

The single GST replaced several former taxes and levies which included: central excise duty, service tax, additional customs duty, surcharges, state-level value added tax and Octroi. Other levies which were applicable on inter-state transportation of goods have also been done away with in GST regime. GST is levied on all transactions such as sale, transfer, purchase, barter, lease, or import of goods and / or services. India adopted a dual GST model, meaning that taxation is administered by both the Union and State Governments. Transactions made within a single state are levied with Central GST (CGST) by the Central government and State GST (SGST) by the State governments. For inter-state transactions and imported goods or services, an integrated GST (IGST) is levied by the Central Government. GST is a consumption-based tax, therefore, taxes are paid to the state where the goods or services are consumed not the state in which they were produced. IGST complicates tax collection for State Governments by disabling them form collecting the tax owed to them directly from the Central Government. Under the previous system, a state would only have to deal with a single government in order to collect tax revenue.

HSN code in GST

HSN (Harmonized System of Nomenclature) is a 6-digit for identifying the applicable rate of GST on different products as per CGST rules. If a company has turnover upto Rs. 1.5 Crore in preceding financial year then they need not to mention HSN code while supplying goods on invoices, if a company has turnover more than 1.5 crore but up to 5 crore then they need to mention 2 digit HSN code while supplying goods on invoices and if turnover Rs. 5 crore then they shall mention 4 digit HSN code on invoice.