The Goods and Services Tax (GST) is the biggest game-changer in the paradigm of India’s indirect tax structure since the economy opened up some 25 years ago.
The GST in India is said to be an answer to many financial problems. The Goods and Services tax or what is more commonly referred to as the GST is expected to replace the indirect taxes which are levied by the State and the Central Governments and provides a much more streamlined alternative.
Business owners will also find India as a unified market who want to bring a lot of black money right into the mainstream economy. The tax is supposed to be implemented at every step of value creation.
Our previous tax structure had a value added tax structure on both the state and central levels. VATs cover only sales and sellers and is not allowed to claim the credit against VAT which is paid on earlier purchases.
It does exclude a number of other taxes which covers luxury and entertainment tax within the states. Once the goods and service tax is implemented it would mean a cascading sequence of tax credits. At each stage, the seller would be able to set off his taxes. Thankfully, the consumer, at the end of the line, having to bear the cascading effect of the taxes till now, would only have to bear the taxes levied by the last dealer.
Here are the eight things to bear in mind about the GST Bill in India,
• The GST is an indirect taxation where most of the current taxes are merged into a single taxation system.
• Now that the the GST Bill is passed, it will allow both the Centre and the states to charge an indirect tax on the several things like the manufacture, sale, and the consumption of goods and services across the country.
• Saying it in a nutshell, the GST would bring together all taxes in one basket all levied by state and Central government and unify them into a single-tax sturture thus eliminating the system of multiple taxations and also promote the concept of one nation, one tax.
• The GST is governed by the GST Council which is governed by the Finance Minister. The finance mister Mr. Arun Jaitley's says that once all taxes are removed and the cascading effect of the taxes is removed, the prices of goods will also come down substantially.
• A smooth GST rollout is a challenge in itself, as it needs a coordination between the states and the Centre to ensure that there are uniform tax rates for all goods and services.
• The GST council has put forward a system of a four-tier uniform tax slab of 5, 12, 18 and 28 per cent on goods and services, along with an additional cess on demerit goods which includes tobacco products, luxury cars, and aerated drinks.
• The Food items which have been kept in the zero-per cent slab is not expected to attract any extra taxes. As of now, the petroleum products too which are under the GST will also remain in zero tax slab.
• With the GST being levied there are many taxes which will be subsumed such as, Centre-level taxes which includes the Sales Tax, Excise Duty, and the state-level taxes like the luxury tax, the Value-added Tax (VAT), Entertainment Tax and so on.
Thus, the above important points on the GST proves that it is one indirect tax for the entire nation, which will ensure that India remains, one unified common market.
The GST in India is said to be an answer to many financial problems. The Goods and Services tax or what is more commonly referred to as the GST is expected to replace the indirect taxes which are levied by the State and the Central Governments and provides a much more streamlined alternative.
Business owners will also find India as a unified market who want to bring a lot of black money right into the mainstream economy. The tax is supposed to be implemented at every step of value creation.
Our previous tax structure had a value added tax structure on both the state and central levels. VATs cover only sales and sellers and is not allowed to claim the credit against VAT which is paid on earlier purchases.
It does exclude a number of other taxes which covers luxury and entertainment tax within the states. Once the goods and service tax is implemented it would mean a cascading sequence of tax credits. At each stage, the seller would be able to set off his taxes. Thankfully, the consumer, at the end of the line, having to bear the cascading effect of the taxes till now, would only have to bear the taxes levied by the last dealer.
Here are the eight things to bear in mind about the GST Bill in India,
• The GST is an indirect taxation where most of the current taxes are merged into a single taxation system.
• Now that the the GST Bill is passed, it will allow both the Centre and the states to charge an indirect tax on the several things like the manufacture, sale, and the consumption of goods and services across the country.
• Saying it in a nutshell, the GST would bring together all taxes in one basket all levied by state and Central government and unify them into a single-tax sturture thus eliminating the system of multiple taxations and also promote the concept of one nation, one tax.
• The GST is governed by the GST Council which is governed by the Finance Minister. The finance mister Mr. Arun Jaitley's says that once all taxes are removed and the cascading effect of the taxes is removed, the prices of goods will also come down substantially.
• A smooth GST rollout is a challenge in itself, as it needs a coordination between the states and the Centre to ensure that there are uniform tax rates for all goods and services.
• The GST council has put forward a system of a four-tier uniform tax slab of 5, 12, 18 and 28 per cent on goods and services, along with an additional cess on demerit goods which includes tobacco products, luxury cars, and aerated drinks.
• The Food items which have been kept in the zero-per cent slab is not expected to attract any extra taxes. As of now, the petroleum products too which are under the GST will also remain in zero tax slab.
• With the GST being levied there are many taxes which will be subsumed such as, Centre-level taxes which includes the Sales Tax, Excise Duty, and the state-level taxes like the luxury tax, the Value-added Tax (VAT), Entertainment Tax and so on.
Thus, the above important points on the GST proves that it is one indirect tax for the entire nation, which will ensure that India remains, one unified common market.
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