2. With the Implication GST all the other taxes like CST, VAT, Service Tax and Excised Duty will be abolished and only in type of tax as GST will be quoted in the Invoice.
GST : Goods and Sevice Tax
GST, also known as Goods and Services Tax, is slated to be a landmark reform of indirect taxes in India. All central and state taxes will come be merged into GST once it comes into effect.
Goods and Services Tax (GST) is a part of the proposed tax reforms that center round evolving an efficient and harmonized consumption tax system in the country. Presently, there are parallel systems of indirect taxation at the central and state levels. Each of the systems needs to be reformed to eventually harmonize them.
Implementation Phase
For the first year of implementation, the finance minister proposed 3 rates – a maximum rate of 20% and a lower rate of 12% for for goods, and 16% for services. According to him, in the 2nd year the rates should be 18%, 12% and 16%. By the third year, the finance minister said GST should move towards a single rate of 16%.
The revenue from GST will be shared equally by the states and centre.
Which Country introduced GST first?
In 1954, GST was introduced for the first time in France. Today this tax has spread across 140 countries.
How GST will have its impact in the revenue for producing States?
GST is a consumer based tax and not origin based. Under this structure of GST, the tax will be collected by the states where the goods or services actually consumed.
Who would be impacted by the implementation of GST?
All Business whether engaged in the sales or supply of services would be impacted by GST. If you are dealing Goods covered under GST or if you are rendering any service you will be covered under GST.
What are the various types of GST?
There are two types of GST
- Unified or Single GST and
- Dual GST.
What type of GST is expected to be applied in India?
In India, dual GST is expected to be proposed wherein Centre and State will be levying on the transactions of the value of Goods or Service. In India, due to federal structure, there is a proposal to introduce dual GST system.
What is dual GST?
Under dual GST, it is levied by both the Central Goods and Service Tax (CGST) and State Goods and Service tax (SGST) will be levied on the taxable value of the transaction.
What will be the expected rate of GST?
The rate is expected to be in the range of 14 to 16%. Once the total GST is determined, the central and states have to agree on Central GST and State GST rates.
Will there be different rates for Goods and for Services?
There will be single rate of GST for Services and however for Goods there would be few rates as under:
- Revenue Neutral rates
- Merit Rates
- Special rates for gold, silver, precious metals around 1%
- Zero rate for goods of social importance.
Whether Inter State supply of services will be subjected to GST?
Yes. Whereas detailed study regarding place of supply rules is being designed and it will be a major challenge to the policy makers.
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