Goods and Service Tax
Goods and Service Tax (GST) is levied on the supply of goods and services. Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. GST is a single domestic indirect tax law for the entire country.
France
France was the first country to implement GST to reduce tax- evasion. Since then, more than 140 countries have implemented GST with some countries having Dual-GST (e.g. Brazil, Canada etc.
Atal Bihari Vajpayee Government
2000: In India, the idea of adopting GST was first suggested by the Atal Bihari Vajpayee Government in 2000. The state finance ministers formed an Empowered Committee (EC) to create a structure for GST, based on their experience in designing State VAT.
In 2017, the GST Bill was passed in the Lok Sabha and Rajya Sabha. On 1st July 2017, the GST Law came into force.
The goods and services tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. The GST is paid by consumers, but it is remitted to the government by the businesses selling the goods and services.
The GST council has fitted over 1300 goods and 500 services under four tax slabs of 5%, 12%, 18% and 28% under GST. This is aside the tax on gold that is kept at 3% and rough precious and semi-precious stones that are placed at a special rate of 0.25% under GST.
The features of GST can be summarized as under:
Subsuming of 17 taxes at Central/States level.
Consumption Based Tax.
One Tax rate across the country.
Taxable event – “Supply of Goods or Services”
No differentiation in Goods or Services.
Comprehensive tax on Goods & Services.
No tax on tax.
Free flow of credit.
Advantages of GST
GST eliminates the cascading effect of tax. ...
Higher threshold for registration. ...
Composition scheme for small businesses. ...
Simple and easy online procedure. ...
The number of compliances is lesser. ...
Defined treatment for E-commerce operators. ...
Improved efficiency of logistics. ...
Unorganized sector is regulated under GST.
Disadvantages of GST in India-
Additional Software Expense. Most businesses use ERP or accounting software to manage their day-to-day operations. ...
Online Tax Regime. GST is an online tax system. ...
Higher Taxes for SMEs.
GST calculation can be explained by simple illustration : If a goods or services is sold at Rs. 1,000 and the GST rate applicable is 18%, then the net price calculated will be = 1,000+ (1,000X(18/100)) = 1,000+180 = Rs. 1,180.
The 4 types of GST in India are:
SGST (State Goods and Services Tax)
CGST (Central Goods and Services Tax)
IGST (Integrated Goods and Services Tax)
UGST (Union Territory Goods and Services Tax)
With taxable distributions, the transferee beneficiary must pay the GST tax. When a taxable termination occurs, the trustee of the trust is responsible for paying the GST tax. If the taxable event is a direct skip from the outset, the transferor (grantor) pays the GST tax.
GST Council is an apex member committee to modify, reconcile or to procure any law or regulation based on the context of goods and services tax in India. The council is headed by the union finance minister Nirmala Sitharaman assisted with the finance minister of all the states of India.
Arun Jaitley
Seven months after the formation of the then Modi government, the new Finance Minister Arun Jaitley introduced the GST Bill in the Lok Sabha, where the BJP had a majority
Some of the most popular countries that offer the financial benefit of having no income tax are Bermuda, Monaco, the Bahamas, Andorra and the United Arab Emirates (UAE). There are a number of countries without the burden of income taxes, and many of them are very pleasant countries in which to live.
GST Payment & Due Date
As per the guidelines, every registered regular taxpayer has to furnish the GST returns on a monthly basis, and pay the requisite tax by the due date for payment of GST – 20th of every month.
Credit can be claimed only if the following conditions are met:
You are in possession of a tax invoice or debit note issued by a registered supplier;
You have received the goods or services or both;
You have furnished the GST return;
Tax charged in respect of such supply has been actually paid by the supplier;
The government has appointed senior officers to monitor implementation of GST with a focus on resolution of any difficulties being faced by consumers. ... The officers will be ensuring registration of traders, display of tax rates in shops, awareness camps and publicity, GSTN functioning, proper billing in shops etc.
Benefits of GST
A common tax base and common system of classification of goods make an integrated taxation system. It will boost export and manufacturing activity because there is no GST levied on export, generate more employment and therefore increase GDP leading to substantive economic growth.
Positive Impact of GST on the Common Man
Introduction of Goods and Services tax eliminated the cascading effect of taxes i.e. tax on tax. GST reduced the burden of taxes from the manufacturing area, thus manufacturing costs will be reduced. ... Low prices will directly or indirectly increase demand/consumption of goods.
18%
The rate of Service Tax was 15% whereas the rate of GST is 18%. A lot of people are of the opinion that the effective cost of having a loan would increase as the rate of GST is 3% higher than the rate of Service Tax.
HSN
HSN code stands for “Harmonized System of Nomenclature”. This system has been introduced for the systematic classification of goods all over the world. HSN code is a 6-digit uniform code that classifies 5000+ products and is accepted worldwide.
The GST rate in India for various goods and services is divided under 4 slabs; these are 5% GST, 12% GST, 18% GST, and 28% GST.
In the case of some goods, direct and indirect taxes imposed by government raise its cost upto 30%. After the implementation of GST, it will reduce. The GST also reduces the cascading effect of tax which helps in making the trade simple and reduces the tax Burden of Entrepreneurs.
