The Curious Case Of Goods & Service Tax

1

The Curious Case Of

Goods & Service Tax

2

What is GST?

Goods and Services Tax (GST) is a comprehensive tax levy on manufacture, sale and consumption of goods and services at the national level.

GST is expected to improve tax collection by breaking down individual tax barriers between states and boost India's economic development via a uniform tax rate.

3

Copyright@Biz2Credit 2015

Tell Me More About It

4

• Would apply to all goods and services except alcohol for human consumption, electricity and real estate

• Applicable only on supply of goods and services

• Destination based tax opposed to current origin based tax

• Two types: Central (CGST) and State Based (SGST). Integrated GST (IGST) to be applied on inter-state supply and will be collected by centre

• Additional tax not exceeding 1% on inter-state trade in goods to be levied.

• Input Tax Credit of additional tax wouldn’t be permitted

• Exports would be sub-zeroed

Salient Features

5


So Does Implication of GST Means Freedom From Other Taxes?

6


YES..!But only from some of them, which are..

7

• Central Excise Duty

• Duties of Excise (Medicinal and Toilet Preparations, Goods of Special Importance, Textiles and Textile Products)

• Additional Duties of Customs (commonly known as CVD)

• Special Additional Duty of Customs (SAD)

• Service Tax

• Cesses and surcharges insofar as far as they relate to supply of goods or services

Central Taxes

8

State Taxes

• State VAT

• Central Sales Tax

• Purchase Tax

• Luxury Tax

• Entry Tax (All forms)

• Entertainment Tax (not levied by the local bodies)

• Taxes on advertisements

• Taxes on lotteries, betting and gambling

9


But How is It Beneficial to Small Business?

10

Benefits

• Simple tax structure by elimination of various taxes.

• Reduce tax burden on producers.

• Boost Exports as markets will become more competitive.

• India expected to gain $15 billion by implementing GST.

• Better economic health as it will boost GDP between 0.9- 1.7%.

*Source: www.gstindia.com, National Council of Applied Economic Research

11


But All Good News Is No Good News

12

Drawbacks It Holds

• Loss of autonomy for states

• More tax burden on end consumers in the short-term

• High prices could also lead to inflation

13


Recent Updates

14

Recent Developments

• The Constitution Amendment Bill needs to be passed by a 2/3rd majority in both Houses of Parliament and subsequent ratification by at least half of the State Legislatures. The Bill has been passed by the Lok Sabha on 06.05.2015. It was referred to the Select Committee of Rajya Sabha on 12.05.2015.

• The Select Committee has since submitted its Report on the Bill on 22.07.2015. The Bill awaits passage in the Rajya Sabha.

• The Bill is expected to be passed till April' 17 as earlier it was planned to be executed till April' 16.

• IMF has urged India to prioritize in advancing GST.

• Computerization of Commercial Tax Dept. is completed to set the platform for GST.

15

Copyright@Biz2Credit

2015

Thank You !For Queries –

Call - 1800-300-20653 | Email - [email protected]

www.biz2credit.in

Economy & Finance

The Curious Case Of Goods & Service Tax