The GST taxation laws will put an end to multiple taxes like excise, CST, VAT, service tax

etc., which
are levied on different products, starting from the source of manufacturing, till reaching the end
consumer. It will also stop distinguishing a goods from a service and will tax both equally.

The GST is proposed to be a dual taxation regime, where the only two components will be Central
GST (CGST) and State GST (SGST). Under such nomenclature, the total amount of GST for any goods
or service will be distributed in both, the State and Central exchequers.

GST essentially rides on the VAT calculations but, with uniform taxation across goods and service.
The interstate sales are handled by an integrated GST model. This system ensures correct allocation
of SGST and CGST and correct flow of money to and from the state and central exchequers.

GST has certain positive aspects like- uniformity in computing taxes for goods and service with
elimination of multiple excise, CST, VAT, service tax calculations; one percentage tax regime for
both goods and service but, the exact percentage is yet to be decided and accounting will
become much simpler.

However GST comes with its own set of cons. VAT and Service tax on some products may be
higher than the current levels. However, essential food items which were not taxed earlier in
the VAT regime will continue to not be taxed, like basic food supplies. Most of the developed
economies use a single GST and not a dual GST. Hence, it will still be a very complicated billing
and reconciliation IT machinery. Since the mechanism is still complicated, it cannot completely
eliminate black money and tax evasion.

For consumers, GST will help bring in certain benefits. GST will lead to the elimination of multiple
excise, CST, VAT, service tax calculations. For both goods and services and less confusion in
determining what constitutes a good or what a service is. Double taxation means the consumer pays
tax on an item, on which already government has collected tax from the manufacturer under some
other head.