GST — A Brief Outlook

What is GST ?

The long awaited Goods and Services Tax has finally roll out on July 01 2017, ending a swerve of indirect taxes imposed by the Centre as well as respective States and Union Territories till now GST, the single tax rate for products and services will be applicable in any part of the country. The present 17 indirect taxes have been merged into one tax i.e. GST. The taxes that have been merged are — Central Excise duty, Duty of Excise (Medicinal and Toilet preparations), Additional Duties of Excise (Goods of Special Importance), Additional Duties of Excise (Textiles and Textile Products), Additional Duties of Customs (commonly known as CVD), Special Additional Duty of Customs (SAD), Service Tax, Cesses and surcharges insofar as they relate to supply of goods or services, State VAT, Central Sales Tax, Purchase Tax, Luxury Tax, Entry Tax (All forms), Entertainment Tax (except those levied by the local bodies), Taxes on advertisements, Taxes on lotteries, betting and gambling, State cesses and surcharges insofar as they relate to supply of goods or services.

The GST will have a big impact on the compliances for trade and industry sector. There will be seamless flow of credit across the value chain. Also there will be removal of cascading effect. The GST has been segregated as Central Goods and Service Tax (CGST), State Goods and Service Tax (SGST) and Integrated Goods and Service Tax (IGST). The prescribed GST rates shall be — 5%, 12%, 18% and 28%. The same has been defined as Destination based tax, the taxable event for GST is supply. It all depend where the supply of Goods or services has taken place and accordingly tax is being charged.

The government has also prescribed a threshold exemption limit — INR 20 lakhs & INR 10 lakhs for special category States & North Eastern States. It’s a PAN based registration. The government has provided to deposit taxes by internet banking, NEFT/RTGS, debit card, credit card & over the counter (OTC). The main technology backbone of GST is Goods and Service Tax network (GSTN). It provides IT Infrastructure and services to the Central and State Governments, tax payers and other stakeholders for implementation of the Goods and Service Tax (GST).

Benefits of GST

GST is a win — win situation for the entire country. It brings benefits to all the stakeholders of industry, Government and the consumer. It will lower the cost of goods and services, give a boost to the economy and make the products and services globally competitive. The significant benefits of GST are:

• Creation of unified national market — GST aims to make India a common market with common tax rates and procedures and remove the economic barriers thus paving the way for an integrated economy at the national level.
• Mitigation of ill effects of cascading — By subsuming most of the Central and State taxes into a single tax and by allowing a set-off of prior stage taxes for the transactions across the entire value chain, it would mitigate the ill effects of cascading, improve competitiveness and improve liquidity of the businesses.
• Elimination of multiple taxes and double taxation — GST will subsume majority of existing indirect tax levies both at the Central and State level into one tax i.e. GST which will be leviable uniformly on goods and services. This will make doing business easier and…

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