GST : THE WAY FORWARD – Part 1

 

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GST – Goods and Service Tax is one indirect tax for the whole country aiming to make the country as one unified market. It is a single tax on supply of goods and services right from the manufacturer and consumer. Credit of the input taxes paid at each stage  will be made available in the subsequent stage of the value addition. The final consumer will hence bear only the GST charged by the last dealer in the supply chain, with offsets benefit at all the previous stages.

The benefits for the business and industry is huge because the compliance is easy where IT based online system will make the system transparent. Further the uniformity of indirect tax rates and structure across the country is a boon. Being tax neutral in the country will help to promote the business from any place in the country. Also the cascading effect of the taxation will go away which allows hidden cost of tax to go away.  Businesses and services will become more competitive.

If one looks from the perspective of the central and state government , easy administration  will reduce the cost of the government. It will promotes flexibility and transparency in the business conduct. There will be better control on the lekages of the input credit tax.  GST will reduce the cost of collecting the revenue and will ensure efficiency in the collection mechanism.

The  taxes which will be replaced and again come as single taxes from the Central Government   are :

  • Central sales tax (b) Additional excise duty (c) Service Tax (d) Countervailing duty  (e) Special additional duty of Customs .

At  the state level the following taxes will be subsumed :

  • VAT/ Sales Tax (b) Entertainment Tax (c) Purchase Tax (d) Luxury Tax (e) Taxes on lottery

GST will be administered in India  in two fold (a)  central GST and (b) State GST . Both GST will be levied simultaneously on every transaction of supply of goods and services  except on the exempted goods and services, goods which are outside the purview  of GST and certain transactions which are below the prescribed threshold limit.

To know more – http://calearning.in

 

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