gst in india  


VAT Service Tax India
Service Tax New Delhi
Central Excise and Service Tax
Service Tax Cenvat
Service Tax Exemption
Service Tax Tribunal

Justification of GST
Preparation for GST
Purchase Tax of GST
GST Rate Structure
VAT at the Central & State level
Goods & Services Tax Model For India
Central and State Taxes under GST
Special Industrial Area Scheme
Inter-State Transactions of Goods
Rules for CGST and SGST
Implementation of GST

GST Software Industry - Overview of Goods and Service Tax – One of the biggest tax reform in India

  • Goods and Service Tax (GST) is a comprehensive value added tax on goods and services. It is considered to be one of the most important tax reforms in India.
  • A dual system of GST is being proposed wherein Central Goods and Service Tax (CGST) and State Goods and Service Tax (SGST) will be levied on the taxable value of different transactions.
  • It is proposed that CGST will be levied in lieu of Customs duty, Central Excise Duty and Service Tax at Central level and SGST will be levied in lieu of Value Added Tax (VAT), Central Sales Tax (CST), Entertainment tax and Luxury tax. There is still no clarity on Octroi, Lottery taxes, Electricity duty, State Excise which may be continued to be charged separately.
  • The rates are yet to be made public but it is anticipated that there may not be more than 2 or 3 rates of GST. Import of goods / services are expected to taxed whereas benefits are expected to be given to exporter of goods / services.
  • With a single GST rate applicable to all goods and services across sectors, intuitive outcome is that the impact will be negative for sectors wherein the current tax rate is lower and positive for those wherein the current effective tax rates are higher than the likely GST rate. However, the negative impact could be muted to the extent of higher input tax credit available. Goods at macro level may remain unaffected on an overall basis, however the services may get hit due to double taxes under CGST and SGST (Presently services are only charged to Service Tax @ 10.30%).
  • GST will be a destination based tax on consumption of goods and services which will be paradigm shift from existing origin based tax system under different Indirect Tax laws. It will subsume most indirect taxes (currently levied on both goods and services) under a single umbrella. Major taxes likely to be subsumed are CENVAT, VAT and Service Tax.
  • Credit of CGST against liability of CGST would be allowed to be adjusted but not against SGST. Similarly SGST cannot be set off against CGST liability. Intra State SGST set off would be available. However, there are challenges in the case of set off of inter State SGST.

Some of the primary objectives of GST-based taxation are:

  1. Ensuring availability of input credit across the value chain
  2. Minimizing cascading effect of taxation
  3. Simplification of tax administration and compliance
  4. Harmonization of tax base, laws, and administration procedures across the country
  5. Minimizing tax rate slabs to avoid classification issues
  6. Prevention of unhealthy competition among States
  7. Increasing the tax base and raising compliance

However, before it can be introduced Central and State government have to sort out issues like agreement on GST rates, constitutional amendments to empower state to collect taxes, etc.

 

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