Goods Services Tax (GST)

How to transition your business from traditional taxation to GST


The goods and services tax (GST), a multi-level value added tax, was first introduced in Canada on January 1, 1991, by then-Prime Minister Brian Mulroney and his finance minister Michael Wilson. Presently, there are around 160 countries that have implemented GST/VAT in some form or other.

India introduced the concept of GST in the Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014 presented at Lok-Sabha by Finance Minister Arun Jaitley on 19 December 2014. The GST bill was passed by Lok Sabha on 6 May 2015. When the GST bill was submitted in Rajya Sabha, the bill was referred to a Select Committee on 14 May 2015. The GST got the approval from Select committee and the bill was passed IN Rajya Sabha on April 2017. The government is in course of implementing GST by July 2017.

GST TAX Policy

In India, a dual GST is proposed whereby a Central Goods and Services Tax (CGST) and a State Goods and Services Tax (SGST) will be levied on the taxable value of every transaction of supply of goods and services.  This simply means 2 GST rates (CGST and SGST) will be applied on all transaction of goods and services within the states.

Whereas for every inter-state purchase and sale of goods and service  Integrated Goods and Services Tax (IGST) would be applied.

GST is proposed to be a comprehensive indirect tax to be levied on manufacture, sale and consumption of goods as well as services at the national level. It will substitute all indirect taxes levied on goods and services by the Central and State Governments in India as of now. The 14 central as well as state or local indirect tax regimes which are replaced by GST are:

  • Excise Duty
  • Service Tax
  • Counter Vailing Duty (CVD)
  • Special Additional Duty of Customs (SAD)
  • central charges and cesses
  • Value Added Tax (VAT)
  • Central Sales Tax (CST)
  • Octroi
  • Entry Tax
  • Purchase Tax
  • Luxury Tax
  • Taxes on lottery, betting and gambling,
  • State cesses and surcharges
  • Entertainment tax (other than the tax levied by the local bodies).

home_interactive_offer_list_1

SINGLE TAX AND BUSINESS UNIFORMITY

GST will provide uniformity in implementation of tax rate and end cascading effects.
One Point Single Tax will be implemented under GST which will help the business community to decide their supply chain, pricing modalities and in long run will help to stabilize pricing market.

home_interactive_offer_list_2

REVENUE GROWTH

Enhancement of Revenue in States and Union with reduce in tax administration of these taxes.

home_interactive_offer_list_3

REDUCED CONFUSION & PAPER WORK

Eliminates the multiplicity of taxation which will in turn help to reduce the paper work.

SUBSCRIBE FOR MONTHLY NEWSLETTER

Subscribe for monthly legislative update Newsletter. The Newsletter will provide you insight on the changes in Direct as well as Indirect taxes.