GST(GOODS & SERVICE TAX)

How GST may affect you!GOODS & SERVICE TAX

Source: Confederation of All India TradesGST(GOODS & SERVICE TAX)G GoodsS ServicesT TaxGoods and Service Tax (GST) is a comprehensive tax levy on manufacture, sale and consumption of goods and service at a national level.GST is a tax on goods and services with value addition at each stage having comprehensive and continuous chain of set-of benefits from the producers/ service providers point up to the retailers level where only the final consumer should bear the tax.

Tax structureBenefit of GSTSimpler Tax structureIncreased Revenue for govt. ExchequerCompetitive pricingOne India One Tax Rate One MarketBoosting the ExportsBetter Economic Health

Whats there in for Consumers?With cascading(Tax on Tax) taxes gone, over a period of time, the lower tax burden would translate into lower prices for goods.Latest updates on GST With 352 votes in favour, the Constitution (122nd Amendment) Bill for introduction of Goods and Services Tax (GST) sailed through the Lok Sabha on Wednesday(06-05-2015).The Congress, in fact, walked out of the House, effectively helping the passage of the Bill while the BJD and the CPI(M) voted in favour. Only 37 votes were cast against the Bill by the AIADMK members.Revenue Neutral RatesRevenue Neutral rates refer to rate of tax where government can get at least same tax which both Centre & State are getting under present system, although it is very difficult as there will be Neither Multiplicity of Taxes nor Cascading effect in GST , Which is present in current scenario.

Proposed Rate of Tax

Rate of TaxThe goods and services tax (GST) rate is likely to be much lower than the 27% that's being discussed,finance ministerArun Jaitlesaid during his reply to the debate on the constitutional amendment bill related to its implementation. "I straightaway concede that 27% would be very high," he told theLok Sabha. He said the 13th Finance Commission had suggested an 18% rate.The decision to keep petroleum out ofGSTfor the time being will also lower the revenue neutral rate (RNR), at which both the Centre and states will not make a loss. Alcohol will also be excluded from GST, which means revenue from these two items will continue to go the states. "Every state's finance minister is not interested in imposing higher taxes on his own people, neither is the central government.

What will be out of GST?Levies on petroleum productsLevies on alcoholic productsTaxes on lottery and bettingBasic customs duty and safeguard duties on import of goods into IndiaEntry taxes levied by municipalities or panchayatsEntertainment and Luxury taxesElectricity duties/ taxesStamp duties on immovable propertiesTaxes on vehiclesExemption of Goods and ServicesConcept of providing threshold exemption of GSTScope of composition and compounding scheme under GSTItems of GS to be exemptTreatment for goods exempt under one state and taxable under the other