Background and History - Indirect Taxes

Before the advent of the Goods and Services Tax (GST) in India, indirect taxation was broadly divided into the following levies:

• Value Added Tax (VAT)/li>
• Central Sales Tax (CST)
• Service Tax
• Excise Duty
• Customs Duty

Different types of taxes were levied for different activities under the erstwhile Indirect tax regime - for instance, VAT / CST as applicable to the sale of goods, Service Tax as applicable on the provision of services, Central Excise Duty was levied on the manufacturing of goods, etc.

However, with the introduction of GST in India with effect from 1 July 2017, VAT, CST, Service Tax, Central Excise Duty, and other indirect taxes have been subsumed under GST. The implementation of the ‘One Vision One Tax’ policy is envisaged with GST in India.