UPSC Exam > UPSC Questions > My teacher said that in previous tax regimes ...
Start Learning for Free
My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example?
Most Upvoted Answer
My teacher said that in previous tax regimes when before GST came into...
Understanding Tax Regimes Before GST
Before the Goods and Services Tax (GST) was introduced in India, the taxation system was fragmented, comprising various indirect taxes like Service Tax and Value Added Tax (VAT).
Key Concepts
- **Service Tax**: This was a tax levied on services provided by service providers. It was applicable to specific services and was collected by the service provider from the consumer.
- **Value Added Tax (VAT)**: This tax was applied to the sale of goods. It was a multi-stage tax collected at every stage of production and distribution.
Lack of Set-Off Mechanism
In the pre-GST era, there was no provision to set off (or offset) taxes paid on one type of transaction against taxes due on another. Here’s how it worked:
Conclusion
The introduction of GST simplified this process by integrating multiple taxes into a single tax system, allowing for seamless input tax credit across different goods and services. This change has significantly enhanced the ease of doing business in India.
Before the Goods and Services Tax (GST) was introduced in India, the taxation system was fragmented, comprising various indirect taxes like Service Tax and Value Added Tax (VAT).
Key Concepts
- **Service Tax**: This was a tax levied on services provided by service providers. It was applicable to specific services and was collected by the service provider from the consumer.
- **Value Added Tax (VAT)**: This tax was applied to the sale of goods. It was a multi-stage tax collected at every stage of production and distribution.
Lack of Set-Off Mechanism
In the pre-GST era, there was no provision to set off (or offset) taxes paid on one type of transaction against taxes due on another. Here’s how it worked:
- Example of Service Tax and VAT:
- Suppose a manufacturer provides a service (like maintenance) and charges a Service Tax of ₹100.
- The same manufacturer also sells goods and pays VAT of ₹150 on the purchase of raw materials. - Tax Payment Scenario:
- The manufacturer cannot deduct the ₹100 Service Tax paid from the ₹150 VAT due on the sale of goods.
- Hence, the manufacturer pays both taxes separately, leading to a cascading effect of taxation.
Conclusion
The introduction of GST simplified this process by integrating multiple taxes into a single tax system, allowing for seamless input tax credit across different goods and services. This change has significantly enhanced the ease of doing business in India.
|
Explore Courses for UPSC exam
|
|
Similar UPSC Doubts
Top Courses for UPSCView all
My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example?
Question Description
My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example?.
My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example?.
Solutions for My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example? in English & in Hindi are available as part of our courses for UPSC.
Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
Here you can find the meaning of My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example? defined & explained in the simplest way possible. Besides giving the explanation of
My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example?, a detailed solution for My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example? has been provided alongside types of My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example? theory, EduRev gives you an
ample number of questions to practice My teacher said that in previous tax regimes when before GST came into the picture there is no set of that is sunvare is not set of against and the service tax is not set of vat I don't understand what they are saying can you explain with an example? tests, examples and also practice UPSC tests.
|
|
Explore Courses for UPSC exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup