Salient features of GST- The Goods and Service Tax

Everything you wanted to know about GST

Keywords;  GST stocks, GST benefit calculator,GST bill impact on share market, impact of GST on stock market, GST impact on stocks,effect of GST on car price, Companies to benefit from GST bill, companies that will benefit from GST , GST benefit sectors, GST bill impact on share market, GST benefit to consumer, GST effect on stock market, companies to benefit from GST bill, GST effect on stock market, companies that will benefit from GST ,GST benefiting sectors.

What is GST?

The goods and services tax (GST) Canadian value-added tax charged on most goods and services sold for domestic consumption. The tax is levied to provide revenue for the federal government. GST paid by consumers, but it is collected and submitted to the government by businesses to sell goods and services.

GST In India

At the first level, the GST is introduced to eliminate the shortcomings of the current tax system indirect India. This post will discuss the GST following, how it will fill many gaps in the current system, it works, advantages, salient features, need and it's components.

Example: Why GST?

Suppose Mr. P sells goods with Mr. Q and collecting sales tax; then Mr. P re-sells the goods to Mr. S after charging sales tax. While Mr. Q was compute its sales tax liability, it also included sales tax paid on the previous purchase, which is how it becomes a tax on tax.

This was the case with sales tax a few years ago. At that time, the VAT was introduced in which each person receives credit next phase of the tax paid at the previous stage. This means that when Mr. Q paid Rs tax. 11, it deducts Rs. 10 previously paid.

Similar concept came Consumption and Services Tax Special taxes also, which is called CENVAT credit scheme. To a large extent, the problem of tax cascading effect is solved by these measures.

However, there are still problems with the system that have not been solved to date. Let's talk about these problems now.

The VAT credit is available against the output VAT. Credit excise duty / entry service is available from the special consumption tax on output / service. However, VAT credit is not the available against excise duty and vice versa.

VAT is calculated on a value that includes excise duty. This shows that there is still a tax on the tax!

GST will solve this problem. Let's see how.

Salient Features of GST

The main features of GST are;

1. The GST has two components: a charge by the Centre (hereinafter referred to as Central GST) and the other charged by the Member (hereinafter State GST). The rates for Central GST and state GST would be prescribed appropriately, reflecting the income considerations and acceptability. This dual GST model would be implemented through various statutes (one for CGST and SGST status for each state).
2. However, the basic features of the law, such as liability, the definition of the chargeable event and the taxpayer, implementing measures including the evaluation provisions in the rating, etc. would be uniform in these statutes as possible.
3. Central GST and State GST will apply to all transactions of goods and services for consideration, with the exception of exempt goods and services, goods that are outside the jurisdiction of the GST and transactions that are below the limits prescribed.
4. The Central GST and the State GST are paid to the accounts of the Centre and the States Parties. Must ensure that the heads are responsible for all exhibition services and goods is critical GST or GST status (with the identification of the state to which the tax to be credited).
5. Since the Central GST and State GST should be treated separately, the tax paid in the State GST damage is allowed to be taken as input tax credit (ITC) for the Central GST and can be used only with payment central GST.
6. Use of ICT between the Central GST and State GST would not be allowed, except in the case of inter-State provision of goods and services with IGST model which is explained later.
7. Ideally, the credit accumulation problem because of the GST refund must be avoided, both in the center and the Member States, except in cases such as the export, the purchase of capital goods, tax paid the highest rate etc. output tax where once the time for refund / adjustment should be completed in a time bound manner.
8. As far as possible, a uniform procedure for the collection of both the center of the GST and state GST it would be prescribed under the relevant laws for Central GST and State GST.
9. Administration would be given to the central core GST and GST was in the United States. This would imply that the Centre and the Member States cooperate jurisdiction over the whole value chain and for all taxpayers, on the basis of thresholds for goods and services provided to the United States and the Centre.
10. The current threshold prescribed in various Acts VAT status under which VAT is not applicable varies from state to state. A threshold uniform State GST through us is desirable and, therefore, it is believed that a threshold of Rs.20 lakh annual gross business volume for both products and services for all members of the Union and can be taken with a adequate compensation for members (in particular, the states in the North-Eastern Region and special category States), where lower threshold had prevailed in the VAT system. Taking into account the interest of small traders and small industries and to avoid dual control, Member States also considered that the threshold for Central GST for goods may be kept at Rs.1.5 crore and services Central GST threshold can also be appropriately high. Remember that today there is a separate utility threshold (Rs. 10 lakh) and goods (Rs. 1.5 Crore) service tax and CENVAT.
11. Member States are also of the opinion that the composition of the system / aggravate the purpose of GST should have a cap on annual gross sales and a tax rate level compared to the volume of the gross annual revenue. In particular, there was a cut for Rs composition. 50 lakh of gross annual income and a minimum rate of 0.5% across America. The system will also allow an option for GST registration for dealers with a lower cutting composition turnover.
12. The taxpayer will have to submit periodic returns, in common format, as far as possible, both for the Central GST authority and the State GST authorities concerned.
13. Every taxpayer must be assigned a taxpayer identification number associated with the PAN for a total of 13/15 digits. This would bring the GST system connected to the PAN, in line with the current system based on the NAPs for the income tax, facilitating the exchange of data and compliance of taxpayers.
14. Bearing in mind the need for the convenience of taxpayers, functions such as assessment, implementation, monitoring and auditing would be taken by the authority is collecting the tax, with the sharing of information between the Centre and the states.
15. All assessees / retailers who are already registered under excise duty / tax services center of the existing legislation / VAT should get fresh record. The existing recording will be converted to the GST registration.
16. A Special Purpose Vehicle called GSTN has been created to meet the needs of the GST. The GSTN provides shared IT infrastructure and services to central and state governments, taxpayers and other stakeholders for the implementation of the GST.

BENEFITS OF GST

Apart from any credit allocation, there are several other benefits of the introduction of the GST in India:

1. Possible price reduction: Due to comprehensive and transparent credit, manufacturers or traders do not have to include taxes as part of their cost of production, which is a great reason to say that we can see lower price. However, if the government seeks to introduce the GST with a higher rate, it could be lost.
2. Increase government revenues: This may seem a bit vague. However, even at the time of the introduction of VAT, government revenues actually increased instead of falling because many people have resorted to paying taxes rather than evade the same. However, the Government may wish to introduce the GST to a neutral rate income, in which case the income may not see a significant increase in the short term.
3. Less respect and the cost of the procedure: Instead of keeping the big issues, returns and reports under various different laws, all evaluated people will find comfortable under the GST that the cost of compliance will be reduced . It should be noted that individuals are assessed, however, required to keep track of CGST, SGST and IGST separately.

How Will GST help Consumers?

Today, consumers have no idea of ​​the magnitude of the taxes they pay on goods. If you get a bill after the purchase of the goods which is a measure of the VAT you paid, it is an understatement of the actual tax you paid. Remember, before the goods reach the point of sale, the central government collected excise duties. The extent of the excise duty is not mentioned in the bill.

Therefore, today, it is reasonable to assume that we pay taxes well over 20% for most products we buy.

In GST, consumers should benefit in two ways. Firstly, all taxes will be collected at the point of consumption. This means that if a shirt is taxed at 18%, it will include the central government of taxes and the state government taxes. The transparency of taxation should dissuade governments tax without distinction increasingly, because it is related to public reaction.

Second, once the barriers between states are removed, we as consumers will end up paying a "tax on tax", which is what happens when goods move across the borders of the state.

References;

"Punjab ratifies GST Bill". Centre for Monitoring Indian Economy Pvt. Ltd. (CMIE). 2016-09-13. Retrieved 2016-09-13.

https://en.wikipedia.org/wiki/Goods_and_Services_Tax_Bill#cite_note-41

http://www.investopedia.com/terms/g/gst.asp

https://www.quora.com/What-is-the-difference-between-the-current-taxation-and-the-new-goods-and-services-tax-GST-in-India-What-is-the-impact

GST Bill: How the tax reform advanced through the years", The Indian Express, 11 August 2015

"GST Journey So Far, Know GST history - GST India- GSTSEVA.COM". gstseva.com. 22 May 2015.

CA Gaurav Gupta. "GST India, Service Tax, News, FAQ, Reference, Presentations, Reports". gstindiaguide.com. MGS Advisors. Retrieved 2016-09-29.

Keywords; Companies to benefit from GST bill, companies that will benefit from GST , GST  benefit sectors, GST  bill impact on share market, GST benefit to consumer, GST  effect on stock market,,GST stocks, GST  benefit calculator, companies to benefit from GST  bill, GST  effect on stock market, companies that will benefit from GST ,GST  benefit sectors,,gst bill impact on share market, impact of GST  on stock market, GST  impact on stocks,effect of GST on car price.

Please drop few lines here; Comments to current post will help us to improve it.