Last updated: July 30, 2019
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What is GST in indiaGST (Goods and Services Tax) is the biggest indirect tax reform of India. GST is a single tax on the supply of goods and services. The GST is paid by consumers but it is remitted to the government by the business selling the good and services.The GST is meant to be a unified indirect tax across the country on products and services.There are around 160 countries in the world that have GST in place.GST is a ambition based taxed where the tax is collected by the state where goods are consumed.The GST: Moving Toward a United IndiaThe GST: Moving Toward a United India.The good and services tax is a sweeping initiative in India the words faster-growing economy. Tax time to addition revenue broaden the tax base and replace a raft of levies with a single value-added tax on diminution.The Ruling party’s strength in parliament smoothed the GST passage.The GST will have federal state and interstate components.It further India is long-standing goal of liberalizing its economy.Benifit Of GST:? TO TRADE? Reduce in multiplicity? Mitigation of cascading/ double taxation? More efficient neutralization of taxes especially for exports? Development of common  national market ? the simpler tax regime? Fewer rate and exemption? Distinction between goods & services no longer requiredTO CONSUMER? Simpler tax system? Reduction in prices of goods & services due to eliminations of cascading? Uniform prices throughout the country? Transparency in taxation system? Increase in employment opportunity Other benefits of goods and services tax are will prevent cascading of taxes as input tax credit will be available across goods and services at every stage of supply.More efficient  neutralization of taxes especially for exports for exports thereby making our products more competitive in the international market and give the boost to Indian exports.Will improve the environment for compliance with all returns to be filed online input to be verified online encouraging more paper trail of a transaction.We can improve the overall investment climate in the country which will naturally benefit the development in the states.Timeline to be provided for important activities like obtaining Like registration, refunds, etc…GST will be beneficial with efficient compliance, ramp up in GDP growth to the center, states, industrialists, the common man and the country.GST will bring in transparent and corruption – fee tax administration, removing the current shortcomings in the indirect tax structure.GST is business friendly as well as consumer friendly.GST will allow India to better negotiation its terms in the international trade forums.GST aimed at increasing the taxpayer base by bringing smiles and the unrecognized sector under its compliance.The GST also subsumes within it the taxes like excise duty. Additional customer duty. Luxury taxes etc.This means that in GST dynasty the producers will be relived of filling multiple returns.From the consumer point of view, the biggest profit would be in terms of a reduction in the overall tax burden on goods. which is currently estimated at 26% to 29%Types of GSTin india:Reverse charges mechanism in GSTWho is a taxable person in GSTMigrate to GSTGST Implementation: Way AheadSix month back we have seen “Demonetization”, its effect and Implementation. The entire episode still haunting Indian economy for its Purpose and the way it was implemented though there was huge clarity and consensus among common people. I am sure those lessons will act as great inputs in GST Implementation and as Indicated it will provide boost for1. Tax Collection2. Enhancing Tax Net3. Reduction in Prices for Mass consumption4. Being catalyst in GDP growth 5. Private Investment will take a leap in view of SARAL TAX REGIME(Assuming tax rate will not change at least for some years to come i.e. 5yrs)              As a professional, looking ahead for more learning Pre and Post GST Implementation.Advantages Of GST TaxThere are few advantages of GST Tax :Reduce income taxCould reduce the income tax rate for company as well as individual taxpayers so that the income system becomes more competitiveEase of Starting BusinessIndia has gained position on the scale of ease of doing business and one of the reasons for this is the implementation of GST. .Reduced Burden of Tax GST has certainly reduced the tax burden. For example, eating out is lot cheaper now. Earlier, the food bill at therestaurant was taxed at 18% but today, if you go out for a meal, the overall tax rate would be only 5%. Easier to Process It is certainly easy to process GST as the tax is now submitted online. You do not have to visit various government department or banks to submit the tax.InflationIt is also speculated that the implementation of GST will control the inflation and the inflation would not rise for the next couple of years.Tax Evasion Easy to Catch With the implementation of GST, it has become easy for thegovernment to catch the tax evasion. The most certain advantage of this is the reduction in black money and increment in the government tax collection. Cost of Tax Collection The cost of tax collection has gone down for the government and this is certainly a benefit. Online tax collection has reduced a significant cost for the government and in addition to this, the simplification of the process is another reason why the cost of tax collection has gone down.High Threshold of RegistrationGST has a higher threshold and under GST, the threshold has been increased from Rs 5 Lakh to Rs 20 Lakh. This means that many small traders are exempted from the GST structure.A clear pathway for e-commerce The GST also defines the pathway for the taxation procedure of e-commerce industry. This was really necessary as it was missing from the previous taxation policies. With increasing dependency on e-commerce, this is certainly a move which is welcomed by all. GST has also reduced the complexities and compliances associated with previous taxation system.GST for theUnorganized sector Unorganized sector was a part which was often left unaccounted for in GDP but with theimplementation of GST the unorganized sector can also be accounted for. There is a provision on online sites to stay compliant with GST in case of unorganized sector.Way ahead is to reform indirect tax regime with GSTThe Centre needs to follow through with pending legislation for the goods and services tax (GST). The pressing need to change over from the dual value-added tax  system in the Centre and the states to an integrated GST, with tax levied only on the value added and input tax credits seamlessly available across the value chain. It would shore up transparency and boost tax efficiency.The panel has called for a standard rate and a lower rate for merit goods of mass consumption, plus a still-lower rate for precious commodities like gold.In addition, it has called for higher taxes of up to 40% on luxury cars and petroleum products, and similar ‘sin taxes’ on tobacco and potable alcohol. It is also notable that the committee backs tax on hitherto exempt heads like education and health.The report is also explicit in recommending that exemption on excise duty and the like be done away with. Such exemptions amount to negative protection against import competition, as input tax credit cannot be claimed. It makes perfect sense to widen the indirect tax base by including most goods and services, and to keep the rates low. Indirect taxes are by definition regressive, paid by all and sundry. We need to keep them moderate to encourage compliance and raise tax buoyancy going forward.The fact of the matter is that we still have a high-cost tax structure thanks to cascading rates and tax-on-tax. The way ahead is to reform the indirect tax regime with GST. A standard GST rate at 16% makes eminent sense. Also, a lower rate of 12% (6% each for the Centre and states) for select goods of mass consumption may be considered. And precious metals can be levied 4% (2% + 2%).The GST Council needs to work at uniform rates so as to have a truly national market. It also needs to decide on a date for including key petro-products in the GST regime.Such items do provide disproportionately high tax revenue for both the Centre and the states. But given the polluting externalities of petro-goods, along with the standard GST rate, a top-up non-Vatable rate of, say, 24% would make sense. A similar rate structure can be envisaged for potable alcohol and tobacco. In due course, it would also make sense to include electricity duty and real estate in GST