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Goods And Services Tax In India

2017-08-09 12:25:09 | Legal Services
Goods and Services Tax
GST or Goods And Services Tax will lead to the economic integration of India or so is believed by Mr. Arun Jaitley, the Finance Minister Of India. But what exactly is GST? It’s an indirect tax which officially is known as The Constitution (One Hundred And Twenty-second) Bill, 2014 which proposes a national VAT (Value Added Tax) to be implemented in India. GST will be implemented on manufacture, consumption, and sale of Goods and Services throughout India and is to replace taxes levied by state and Central Government. GST in India is introduced so as to make the current confusing Indirect Tax System in India much simpler. Discussed below is how GST will work in India and will it actually be beneficial?
The GST basically have two components- State GST (SGST) and Central GST(CGST), both having different powers but both equally important. GST will supposedly help improve the tax compliance and is intended to be functional from first of April, 2016. It will be a destination based tax and not origin based. An Integrated GST (IGST) will be used in Inter-State transactions.
The word ‘Tax’ is enough to scare anyone. Courtesy of their complex nature, however, this bill will amalgamate many Central and State taxes into one single tax, this will, therefore, help not only the general public but Entrepreneurs and their companies especially the multinational ones and it would definitely be easy to handle and administrate thanks to the transparency of the bill. GST, in short, will unify different taxes that can easily confuse the general public. This confusion thus leads to the ignorance of a customer. Not understanding the concept of tax properly, the customer tends to ignore it, but ignorance can be dangerous especially when it’s your money at stake. Therefore, comes GST in the picture so that there are no more cons and no more cheating.
GST would replace the following taxes currently levied and collected by the Center:
Central Excise duty
Duties 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 far as they relate to supply of goods or services
State taxes that would be subsumed within the GST are:
State VAT
Central Sales Tax
Purchase Tax
Luxury Tax
Entry Tax (All forms)
Entertainment Tax (not levied by the local bodies)
Taxes on advertisements
Taxes on lotteries, betting, and gambling
State cesses and surcharges insofar as far as they relate to supply of goods or services.
Even though GST sounds an amazing solution to the current indirect tax system in India, one needs to understand that this is being implemented so as to bring more simplicity as well as unification. Hence, GST will only work when every state will implement it together at the same time and with the same prices. Also, being a destination based tax it should be carefully noted as to where the goods are going. The states are still confused whether to go with GST or not but the current political environment of India ensures that GST will soon be coming down to India. Well, adaptability to change is one of the most desired and important characteristics, introducing GST will surely test this characteristic of all the citizens. Only time will tell us as to how much can this Dual frame of GST will help simplify the situation and will it be able to survive in a country like India. Until then, make your own suggestions and perceptions regarding the concerned topic and as always Stay legal and play smart!
This article has been contributed by Simmi Setia, Content Writer at LegalRaasta, an online

This article has been contributed by Simmi Setia, Content Writer at LegalRaasta, an online portal for Section 8 company registration, Nidhi company registration, IEC registration.

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