GST or Goods and Services Tax (GST) is
defined as the tax levied when a consumer makes a purchase. It can be defined
as a comprehensive indirect tax and all-in-one tax which amalgamates the
manufacture, sale, and consumption of
goods taxes along with the services.
It is a simplified version of taxes as GST
is set out to replace all indirect taxes which are levied on goods and services
by both the Indian Central and State governments.
This simplification of taxes puts it under
a single umbrella to eliminate the impact of taxes on the production and also
the distribution of prices of various
goods and services. Accounting firms ina Chennai can help you unravel the nitty-gritty of the GST for of tax regulations.
Impact
of Taxes
The current complex tax structure involves
the taxes to be levied by the State and
Union governments separately leading to the increasing and complicated tax
structure. The taxes are implemented at various rates and at multiple points
which bamboozle most taxpayers and that is why the help of a tax consultant in Chennai or any other
place in India can make things easier for you.
As far as the Centre is concerned there are various taxes it levies
on the common people like the Income tax, excise duty, service tax, central sales
tax and security transaction tax. And at the state level, it includes VAT or sales tax, property tax, state excise, entry
tax and agriculture tax.
It almost acts as a double whammy as it
leads to an increased tax burden on the Indian products making the prices and
sales of products in the domestic, as well as
international markets, shoot up.
So
is GST the Savior in Disguise?
The cascading effect of multiple taxes
proves to be a burden on the common man and the only solution as of now is the
GST. The framework of the proposal of dual GST means that will have a federal
structure.
To explain further the GST will basically
be divided into three kinds of taxes that includes Central, State and another
one known as the integrated GST that helps handle inter-state transactions.
Under the present GST tax reform, different kinds of services are included in sale, transfer, barter, exchange, and rental which will include a CGST
and SGST.
The Importance of GST
The
impact of indirect taxes can be explained in a number of ways, the example
which can explain things well is if one
person lets call him A sells goods to
another person B after levying sales tax and then again when B re-sells those
goods to C after levying sales tax on it.
So, when B includes the sales tax paid on
the previous purchase it becomes a tax on tax. This is how GST can simplify
things and makes things easier to the common consumer.
Is
there any Con to the GST Tax?
In India,
there are two forms of GST namely the Central GST or CGST and the state GST or
SGST. The only obstacle to the implementation of GST can be the coordination
amongst the different states. The Centre and States have to agree on one
thing that is the uniformity of GST rates, the inter-state transaction of
different goods and services, there should be a sea change in the
infrastructural standpoint. The transition from the old form of taxes to the
new form of taxes that is the GST pattern must be smooth without any loopholes.
The GST being a destination based tax there
has to be a clarity as to where the goods are going and for that there needs to
be a proper methodology that would ensure
proper management in terms of services provided.
A uniformity of GST in all states at the
same time and the same rates is the only way that will help improve tax
governance.
No comments:
Post a Comment