ALL ABOUT GST

Full Form - Goods and Services Tax (Its an indirect tax)

Constitutional Amendment No. 122
Will be applicable from 1st April 2017, now delayed. Probably from 1st June, 2017
Passed on RS 3rd August, 2016; LS 8th August, 2016
First State - Assam
Levied on manufacture, sell, consumption of goods and services
Will follow destination principle

What do you think about GST?

Sir it is yet to be implemented so we dont know how it will be. But I can say the concept is good.
Will eradicate multiplicity of taxes and the cascading effect. Wider base, better and simplified
compliance, will reduce errors. Start of a new regime, so if from the beginning it is regulated
properly, it will be good for us

TAX RATE SLABS

1. 5%
2. 12%
3. 18%
4. 28% - Luxury Cars, Tobacco, Aerated drinks

Essential items including food will be taxed at a zero rate.

The additional cess and a clean energy cess will create a revenue pool which will be used to
compensate states for any loss of revenue during the first five years of the implementation of
GST

BENEFITS OF GST BILL

Under GST, all the taxes will be integrated, hence, it will be possible to bring a transparency in
the levying of taxes and the burden of taxation will be shared equally between manufacturing
and services. According to experts, by implementing the GST, India will gain billions a year. This
is because; it will promote more exports, create more employment opportunities and boost
growth.

FOR INDIVIDUALS AND COMPANIES

In the GST system, taxes for both Centre and State will be collected at the point of sale. Both
will be charged on the manufacturing cost. Individuals will be benefited by this as prices are
likely to come down and lower prices mean more consumption, and more consumption means
more production, thereby helping in the growth of the companies.

The entire Indian market will be a unified market which may translate into lower business costs.
It can facilitate seamless movement of goods across states and reduce the transaction costs of
businesses. Companies that are under unorganized sector will come under the tax regime.

GST has been envisaged as an efficient tax system, neutral in its application and distributional
attractive. The advantages of GST are:
Wider tax base, necessary for lowering tax rates and eliminating classification
disputes
Elimination of multiplicity of taxes and their cascading effects
Rationalization of tax structure and simplification of compliance procedures
Harmonization of center and state tax administrations, which would reduce
duplication and compliance costs
Automation of compliance procedures to reduce errors and increase efficiency

What is not so right about GST?

This may have an inflationary effect in the country. GST by nature is against the spirit of federalism
as it snatches away the states taxation powers enshrined in the constitution.

Some Economist says that GST in India would impact negatively on the real estate market. It would
add up to 8 percent to the cost of new homes and reduce demand by about 12 percent.

Some Economist says that CGST (Central GST), SGST (State GST) are nothing but new names for
Central Excise/Service Tax, VAT and CST.

The USA and the European Union are now the two biggest economies of the world. In both cases,
they have almost a similar federal structure as India. A considerable amount of power is vested in
the different state of the USA and different nations of the EU, where they enjoy different taxation
system and yet GST was never considered.