GST or Goods and Services Tax is considered as major Tax reform policy in India which will be implemented anytime after April 2017. Most Economist are very positive about GST implementation. We have brought you some Facts about GST or Goods and Services Tax which you should know, this includes advantages and disadvantages of GST as well.
Facts About GST – What is Goods and Services Tax
The Goods and Service Tax or GST is a taxation system where there is a single tax in the economy for goods and services. This taxation system is meant to create a single taxation system in the entire country for all goods and services.
Facts About GST – Advantages
1. GST is a transparent Tax and also reduce numbers of indirect taxes. With GST implemented a business premises can show the tax applied in the sales invoice. Customer will know exactly how much tax they are paying on the product they bought or services they consumed.
2. GST will not be a cost to registered retailers therefore there will be no hidden taxes and the cost of doing business will be lower. This in turn will help Export being more competitive.
3. GST can also help to diversification of income sources for Government other than income tax and petroleum tax.
4. Under Goods and Services Tax, the tax burden will be divided equally between Manufacturing and services. This can be done through lower tax rate by increase Tax base and reducing exemptions.
5. In GST System bothe Central GST and State GST will be charged on manufacturing cost and will be collected on point of sale. This will benefit people as prices will come down which in turn will help companies as consumption will increase.
6. Biggest benefit will be that multiple taxes like octroi, central sales tax, state sales tax, entry tax, license fees, turnover tax etc will no longer be present and all that will be brought under the GST. Doing Business now will be easier and more comfortable as various hidden taxation will not be present.
In the amended Bill a cap Of 18% GST will be applicable on Goods and Services through the country.
Because of this Prices of Those Goods and services on which we used to pay taxes below 18% will be increased.
For example right now we pay around 4-5% Tax on packaged foods. But after GST the total tax on these products will definitely go up which will increase its retail price. Similarly Jewelery, Mobile Bill, Credit Card Bill, Services rates will also go up.
And Prices of those goods and Services on which we used to pay taxes above 18% will be reduced.
Fr example taxes will be reduced on Mini SUV for which we are paying 30-40% Tax right now. After GST it will be reduced to 18%. Similarly Consumer goods like AC, Refrigerator and Transportation cost will also go down.
More than 150 Countries have implemented GST and each of them faced Rise in Inflation for next 3-5 Years.
Facts About GST – Disadvantages
1. Critics say that GST would impact negatively on the real estate market. It would add up to 8 percent to the cost of new homes and reduce demand by about 12 percent.
2. Some Economist says that CGST, SGST and IGST are nothing but new names for Central Excise/Service Tax, VAT and CST and hence GST brings nothing new for which we should cheer.
Updates About GST
1. You can enroll for GST online by visiting government website – https://www.gst.gov.in/
2. There will be four tax slabs of 5%, 12%, 18% and 28%. Luxury and demerit goods will be taxed at 28% plus cess.
3. Unlike aother countries where GST has already been implemented, India opted for dual GST – SGST and CGST, administered by State and Centre respectively.
4. Threshold for GST has been set to 15 Lakh for North east and Hill states, and 20 Lakh for other states.
5. Many Tax Experts say that 1st July 2017 is the best case scenario for Implementation of GST in India