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Good & Services Tax

By debashreeb20 Sep 16, 2011 494 Words
A SUMMARY OF GOOD AND SERVICES TAX (GST)
WHAT IS GST?
Good and service tax is a direct tax code to be implemented by the government. It is a comprehensive indirect tax to be levied on manufacture, sale and consumption of goods as well as services at a national level. Integration of goods and services taxation would give India a world class tax system and improve tax collections. It would end the long standing distortions of differential taxation treatments of manufacturing and service sector. The introduction of goods and services tax will lead to the abolition of taxes such as octroi, Central sales tax, State level sales tax, entry tax, stamp duty, telecom licence fees, turnover tax, tax on consumption or sale of electricity, taxes on transportation of goods and services, and eliminate the cascading effects of multiple layers of taxation. GST will facilitate seamless credit across the entire supply chain and across all states under a common tax base. SALEINT FEATURES

It will be implemented at 3 levels:
1. Central government (CGST)
2. State government (SGST)
3. Inter-state (IGST)
The detailed structure of GST is broadly classified between the state finance ministers & the task force created by the finance commission. STATE COMMITEE VIEW| TASK FORCE VIEW|
Multiple SGST rates for different types of goods as well as services| A single rate both at central and state level should be implemented| Multiple threshold level, for goods in state and central and another threshold level for service| A uniform threshold level for both central and state is to be maintained| For inter-state transaction, the tax levied should be a combination of CGST and IGST.| There will unified bank model for inter-state transaction.| Real estate, alcoholic beverages will not have GST. While on tobacco GST will be levied. | Alcohols, emission fuels & tobacco will be subjected to GST. A comprehensive taxation policy will be adopted for the real estate and financial services.|

Also imports will be covered under GST, but export would not be. SIGNIFICANCE OF GST.
* The tax rate could be managed more easily as only one direct tax code will be implemented. This also means that it will expand the taxation horizon * It would lead to consistency in economy and a flow of cash will be registered. * It will be easier for the manufacturers and service providers to follow one tax regime. DOUBTS OF GST

* A proper pattern has not been decided yet, and this is leading to delay in implementation. It was supposed to be implemented by 2011, but now it has been stalled by another year. * The entire taxation code of India will go for a revamp, hence will lead to tedious work for Governments in different states as well as centre.

GST will prove to be a benefit for the country if implemented properly. The net profit that the government earns now will maybe be less, but the whole taxation code will come in a flow.

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