The GST countdown has already started. In just 3 days of time, we are going to witness a revolution in the Indian economy and existing taxation system. Myriad speculations are running for the past 1 month regarding the upcoming tax. And, we all are anxiously waiting for our own set of questions for the 1st of July Immigration services Integrating highly skilled tax preparation with reliable and personalized service, Unidos Tax & Immigration Services helps Visalia residents achieve their financial goals.
Would the prices decrease?
Does GST mean a bloated bill?
Well, according to experts, GST implementation in India will lower down prices in 30% cases, increase costs by 20% – while 50% sectors would stay unaffected.
Now, let’s delve further into the nuances of GST-
GST is the acronym for Goods & Services Tax. It is a form of indirect tax that will combine the different taxes charged by the State and Central government into one comprehensive Tax online trademark registration.
GST has been introduced under 122nd amendment of the Indian Constitution as “The Constitution Act 2017”. The GST Council, chaired by current Union Finance Minister Arun Jaitley, has been bestowed with the governance of GST.
It will be officially launched all across India on July 1 midnight by our honorary PM Narendra Modi in the parliament.
What is GST?
GST can be defined as a comprehensive, indirect, multi-stage & destination-based tax which would be implemented on each value addition. Under the new tax act, goods & services would be taxed a broad range of rates- 0 percent, 5 percent, 12 percent, 18 percent and 28 percent. 0.25 percent would be levied on rough semi-precious & precious stones. 3 percent GST would be implied on gold. GST would be applicable to all the businesses, irrespective of size and industry.
GST will combine all these following taxes-
- Commercial Tax
- Central Excise Duty
- VAT or Value Added Tax
- CST or Central Sales Tax
- Food Tax
- Entry Tax
- Entertainment Tax
- Luxury Tax
- Purchase Tax
- Advertisement Tax
Major terms related to GST-
- GST– Goods & Services Tax.
- Indirect Tax- the tax whose liability is shared with others.
- Multi-stage tax– Tax that applies to each stage a stuff goes through, right from manufacturing to final sale.
- Destination-based tax– GST framework would vary between interstate and intra-state level transactions.
- CGST– The acronym for Central Goods & Services Tax. In this case, it’s the Central government which will collect the revenue.
- SGST– The acronym for State Goods & Services Tax. In this case, it’s the State government which will collect the revenue.
- IGST– The acronym for Integrated Goods & Services Tax. In this case, it’s the Central government which will collect the revenue from the inter-state sales.
- GST Compliance Rating– refund claims made under GST would be considered on the basis of merit. It would be processed depending on registered taxpayer’s compliance rating.
- GSTIN– It is the acronym for Goods & Services Tax Identification Number. It will be a unique 15 digit code that would be assigned to each businesses falling under GST regime.
How will GST work?
As we can see from the GST framework above, GST would comprise of 3 taxes- CGST, SGST and IGST.
Let’s see how the upcoming tax structure would work and how would it differ from the existing tax structure:
- Intra-state sale
Existing taxation system
The taxation system for intra-state sale under existing taxation system comprises of VAT + Service Tax/Central Excise.
Under GST taxation
The taxation system for intra-state sale under GST taxation system would comprise of CGST + SGST.
Now, let’s say he sold the same item to some dealer in Orissa at Rs. 10,000. GST rate would be 18% and the dealer here would collect something like Rs. 1800- but as IGST. The IGST would go straight to Center. No longer, he would have to pay both SGST & CGST.