Thursday, 13 July 2017

Overview of Goods and Services Tax

The Goods and Services Tax or GST has launched and is set to transform the way we do our taxes. Goods and Services Tax Law in India is a comprehensive, multi-stage, destination based tax that will be levied on every value addition.

GST Replaces the following taxes :

1. Taxes currently levied and collected by the Centre.

  •           Central Excise duty.
  •           Duties of Excise ( Medicinal and Toilet Preparations )
  •           Additional Duties of Excise ( Textiles and Textile Products )
  •           Additional Duties of Excise (Goods of special Importance )
  •           Additional Duties of Custom ( Commonly known as CVD )
  •           Special Additional Duty of Customs ( SAD )
  •           Service Tax

2. State taxes that would be subsumed under the GST are :

  •           State VAT
  •           Central Sales Tax
  •           Luxury Tax
  •           Entry Tax ( all forms )
  •           Entertainment and Amusement Tax (Except when levied by the local bodies )
  •           Taxes on advertisements
  •           Purchase Tax
  •           Taxes on lotteries, betting and gambling

Introduction of GST is an important step in the field of indirect taxes reforms in India.

By integrating a large number of Central and State taxes into a single tax and allowing set-off of prior-stage taxes, it would reduce the ill effects of cascading and pave the way for a common national market.
For the consumers, the biggest gain would be in terms of a depletion in the overall tax load on goods, which is currently evaluated at 25% - 30%.
Introduction of  GST would also make our products competitive in the domestic and international markets. Studies show that this would immediately encourage economic growth.
There may also be revenue gain for the Centre and the States due to widening of the tax base, increase in trade volumes and improved tax compliance.
This tax would be easier to administer as it is transparent in nature.
Join with our GST Centre and learn more about GST.
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