Monday, 25 March 2013

What is GST Goods and Service Tax in India?


What is GST Goods and service tax? What does it mean to you?
If you are resident of India you should know the GST, because it is going to affect you
Ø  GST Goods and Service Tax? It is an indirect tax that will lead to replace of all other indirect taxes such as octroi, central sales & state-level sales tax, excise duty, customs, service tax, and value-added tax (VAT) with a single GST. Both the state and the central governments will impose GST on almost all goods and services produced in India or imported into the country.
Ø  Direct Taxes such Income, Corporate taxes will not be included in GST
Ø  One of the major benefit is a single tax(GST) rather than 7 -8 types of indirect taxes
Ø  As of now goods transportation have huge problem because of different state tax structure. different taxes for different states. Now if GST is implemented goods will move freely with in state borders. this will help all infra and transportation (packers and movers) with a single tax all over in country.
Ø  According to a report by the National Council of Applied Economic Research, GST is expected to increase economic growth by between 0.9 per cent and 1.7 per cent. Exports are expected to increase by between 3.2 per cent and 6.3 per cent, while imports will likely rise 2.4-4.7 per cent, the study found.
Ø  The highest rate of taxation under GST will be around 15 per cent in the first year, and eventually come down to 12 per cent in the second year. By comparison, the current rate of the various indirect taxes levied in India amounts to roughly 20 per cent. Goods deemed necessary or of basic importance will be taxed at a lower rate.
Some states fear that a uniform tax rate, if lower than their existing rates, will dent collections. However, the central government has said it will compensate states for the potential revenue loss. Mr Chidambaram has set aside Rs. 9,000 crore towards the first instalment of the balance of central sales tax (CST) compensation.

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