India is adopting a dual GST, namely the Central GST (CGST) and state GST (SGST). The main hurdle in the implementation will be the coordination among different states. The Centre and States will have to come to consensus on the uniform GST rates, inter-state transaction of goods and services, infrastructural requirements to implement the new tax reform, all of which needs to be worked upon for the smooth transition into GST pattern.
Since GST is a destination based tax, there should be clarity on where the goods are going. Proper methodology should be chalked out as it would require proper management in terms of services provided.
There has to be uniformity in the implementation of GST in all states at the same time and the same rates or else it would be difficult to comply with the law provisions.
GST will have two components namely Central GST levied by the Centre and State GST levied by the states.
Petroleum products, alcohol for human consumption and tobacco have been kept out of the purview of the GST.
The final consumer will have to bear only the GST charged by the last dealer in the supply chain.
The tax collected would be divided between the Centre and the States in a manner that would be defined by the parliament, as per the recommendations of the GST Council.
The bill proposes an additional tax not exceeding 1% on inter-state trade in goods, to be levied and collected by the Centre to compensate the states for two years, or as recommended by the GST Council, for losses resulting from implementing the GST.
Introduction of GST is considered to be a significant step in the reform of indirect taxation in India. Amalgamating several Central and State taxes into a single tax would help mitigate the double taxation, leading to a common national market. From the consumers point of view, the advantage would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%. (Source: Wikipedia)
Reduction in prices: Manufacturers or traders would not have to include taxes as a part of their cost of production, which would lead to reduction in prices.
Lower compliance and procedural cost: There would be reduction in the load to maintain compliance. Also keeping record of CGST, SGST and IGST separately would not be required.
Move towards a Unified GST: Although India is adopting dual GST, it is still a good move towards a Unified GST which is regarded as the best method of Indirect Taxes.GST rollout can help boost India’s GDP growth by 100-200 bps or (1 to 2%) as this will help faster and cheaper movement of goods across the country with a uniform taxation structure.
GST’s successful implementation would give a strong signal to the foreign investors about India’s ability to support business.
GST will be beneficial with more transparency, efficient compliance, ramp up in GDP growth to the Centre, states, industrialists, manufacturers, the common man and the country at large.
IZOOXI PRIVATE LIMITED
Email: info@taxzot.in
Website : http://www.izooxi.com
- Other factors to be considered:
Since GST is a destination based tax, there should be clarity on where the goods are going. Proper methodology should be chalked out as it would require proper management in terms of services provided.
There has to be uniformity in the implementation of GST in all states at the same time and the same rates or else it would be difficult to comply with the law provisions.
- Features of GST:
GST will have two components namely Central GST levied by the Centre and State GST levied by the states.
Petroleum products, alcohol for human consumption and tobacco have been kept out of the purview of the GST.
The final consumer will have to bear only the GST charged by the last dealer in the supply chain.
The tax collected would be divided between the Centre and the States in a manner that would be defined by the parliament, as per the recommendations of the GST Council.
The bill proposes an additional tax not exceeding 1% on inter-state trade in goods, to be levied and collected by the Centre to compensate the states for two years, or as recommended by the GST Council, for losses resulting from implementing the GST.
- Advantages of implementing GST:
Introduction of GST is considered to be a significant step in the reform of indirect taxation in India. Amalgamating several Central and State taxes into a single tax would help mitigate the double taxation, leading to a common national market. From the consumers point of view, the advantage would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%. (Source: Wikipedia)
- The other advantages include:
Reduction in prices: Manufacturers or traders would not have to include taxes as a part of their cost of production, which would lead to reduction in prices.
Lower compliance and procedural cost: There would be reduction in the load to maintain compliance. Also keeping record of CGST, SGST and IGST separately would not be required.
Move towards a Unified GST: Although India is adopting dual GST, it is still a good move towards a Unified GST which is regarded as the best method of Indirect Taxes.GST rollout can help boost India’s GDP growth by 100-200 bps or (1 to 2%) as this will help faster and cheaper movement of goods across the country with a uniform taxation structure.
GST’s successful implementation would give a strong signal to the foreign investors about India’s ability to support business.
GST will be beneficial with more transparency, efficient compliance, ramp up in GDP growth to the Centre, states, industrialists, manufacturers, the common man and the country at large.
IZOOXI PRIVATE LIMITED
143/11/1, Picnic Garden Road,
Kolkata-700039, West Bengal
Phone: +91 84820 88888Email: info@taxzot.in
Website : http://www.izooxi.com
Very Useful Information and helpful for Visitors!
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