Context:
A Group of Ministers (GoM), led by Bihar´s Deputy Chief Minister Samrat Chaudhary, has recommended full goods and services tax (GST) exemption on pure term life insurance policies by reducing it to 5 percent from 18 percent.
What is Goods and Services Tax(GST)?
- The GST or Goods and Services Tax is a consumption-based value addition for most goods and services available for domestic consumption. This tax paid by consumers is remitted to the government by the business selling the goods and services.
Main Features of GST
- Applicable On supply:
- The meaning of the current GST has been that it is applicable on “supply” of goods or services rather than the old manufacture-at-sold-sum concept or sale of good precious metals or provision of services.
- Destination Based Taxation:
- This is opposed to the current principle of origin-based taxation, that is, destination-based consumption taxation.
- Dual GST:
- It is a dual GST with the Centre and the States simultaneously levying tax on a common base. GST should be levied by the Centre called Central GST (CGST) and the levy by the States is known as State GST (SGST).
