The services mentioned under negative list are non-taxable services, which means
they are out of coverage of service tax. 17 services have been specified and any
change in negative list can be done only through the amendment in the Finance Act,
VAT is a tax on the value added to the commodity at each stage in production and
distribution chain. Under VAT, tax is not levied on the portion of tax paid at the
earlier stage; it is levied only on the value added as the credit of tax paid at earlier
stages is allowed to be set off against the tax payable at the next stage.
CGST is Central Goods and Service Tax. This tax is levied on intra-state (within the
state) transactions. Taxes collected under Central Goods and Service tax will be the
revenue for Central Government.
IGST is Integrated Goods and Service Tax. This tax is levied on inter-state (between
2 states) transactions. Revenue collected from IGST will be divided between Central
Government and State Government as per the rates specified by the government.
Businesses dealing only in goods can only opt for composition scheme with annual
turnover below 50lakhs.A person registered under composition scheme will pay tax at rate not more than
1% for manufacture, 2.5% for restaurant sector & 0.5% for traders.
Compensation scheme is the scheme offered by the Central Government to the State
Government for losses suffered by them due to GST. Central Government plans to
provide compensation to the State Governments for 5 years.