What is GST ? Advantages & Disadvantages ! The Story in Layman Terms
OWNER : Shaan khan
GST – Goods & Services Taxes : Applicable from 1 july 2017 – Pros & Cons !
Finally, the government is launching GST on July-1st. It is going to change the entire scenario in terms of indirect taxes. This was a very long pending issue which is finally come to an action. GST is a single tax which will be implemented instead of many different types of indirect taxes. If you have a business you need to pay a certain type of taxes other than income tax like VAT, service tax, excise duty and customs duty all of these taxes are called indirect taxes and all of these including central and state government taxes will be replaced by GST. As the name suggested GST (Goods & Services Tax) this indirect tax will be applicable on all the goods and services.
Who should pay GST?
People with the turnover less than 20 lakh do not have to necessarily register for GST and for Northeast states this limit is 10 lakh. If you have already registered under VAT or any other taxes you have to roll over your registration to GST. If you are selling any goods through any website or providing any services then also GST is mandatory for you.
Advantages of GST:
It will replace 17-20 indirect taxes and simplify the taxpaying process
Finally, the government is launching GST on July-1st. It is going to change the entire scenario in terms of indirect taxes. This was a very long pending issue which is finally come to an action. GST is a single tax which will be implemented instead of many different types of indirect taxes. If you have a business you need to pay a certain type of taxes other than income tax like VAT, service tax, excise duty and customs duty all of these taxes are called indirect taxes and all of these including central and state government taxes will be replaced by GST. As the name suggested GST (Goods & Services Tax) this indirect tax will be applicable on all the goods and services.
Who should pay GST?
People with the turnover less than 20 lakh do not have to necessarily register for GST and for Northeast states this limit is 10 lakh. If you have already registered under VAT or any other taxes you have to roll over your registration to GST. If you are selling any goods through any website or providing any services then also GST is mandatory for you.
Advantages of GST:
It will replace 17-20 indirect taxes and simplify the taxpaying process
The entire Indian market will be unified market
The suppliers, manufacturers, wholesalers, and retailers are able to recover GST incurred on input cost as tax credits this will reduce the cost of doing business which means it will give the fairer price to the consumer.
GST will bring more transparency and it will make corruption free tax administration.
More business entity will come under the tax system thus widening the tax base. This may lead to better and more tax revenue collection.
GST is backed by the GSTN which is a fully integrated tax platform to deal with all the aspects of GST.
Companies which are under unrecognized sector will come under the tax regime.
In the GST system, when all the taxes are integrated, it would make possible the taxation burden to be split equally between manufacturing and services.
Disadvantages of GST
Small business in the manufacturing section will bear most of the brunt of GST implementation. Under the existing excise law business with 1.50 crores turnover have to pay excise duty but under GST this limit has been reduced to 20 lakh which will increase the tax burden for manufacturing SMEs.
Small business in the manufacturing section will bear most of the brunt of GST implementation. Under the existing excise law business with 1.50 crores turnover have to pay excise duty but under GST this limit has been reduced to 20 lakh which will increase the tax burden for manufacturing SMEs.
According to some economist that GST in India would impact negatively on the real estate market. It would add up to 8% to the cost of new homes and reduce demand by 12%
The implementation date of GST is July-1st 2017 which is middle of the year and it is impossible to cross over from one tax structure to the other in just a day hence business will end up running both tax system in parallel which will create so many confusions.
Some retail products like garments and clothes currently have only 4% tax but after GST it will become more expensive.
GST requires a business to register in all states they are opening in. this will increase the burden of compliance.
The aviation industry would be affected services taxes on airfares currently range from six to nine percent but with GST it will increase up to fifteen percent.
Some of the charges application list
Commodity GST Percent Rates
Food items like cereals, Fruits, vegetable, jaggery(gud), food grains, rice and wheat, spice, tea, coffee, sugar, vegetable, mustard oil, newsprints, coal and Indian sweets
NIL
Food items like cereals, Fruits, vegetable, jaggery(gud), food grains, rice and wheat, spice, tea, coffee, sugar, vegetable, mustard oil, newsprints, coal and Indian sweets
NIL
Mobile Phones 12%
Manmade fiber & yarn 18%
TV, Refrigerator, AC, Washing Machine, Microwave, Soft drinks & aerated beverages
28%
Cigarette 28%+5% cess
Heavy bikes, Luxury yachts, privet jets 31%
Ayurvedic & homeopathy medicine 12%
Packed food items like pickles, tomato sauce, fruits preserves 12%
Manmade fiber & yarn 18%
TV, Refrigerator, AC, Washing Machine, Microwave, Soft drinks & aerated beverages
28%
Cigarette 28%+5% cess
Heavy bikes, Luxury yachts, privet jets 31%
Ayurvedic & homeopathy medicine 12%
Packed food items like pickles, tomato sauce, fruits preserves 12%
Services GST Percent Rates
Railways (AC) tickets 5%
Non-Ac restaurant without liquor license 12%
AC restaurant with liquor license 18%
Movie tickets bellow Rs. 100/- 18%
Movie tickets above Rs. 100/- 28%
5 Star hotels 28%
Airlines (Business Class)
18%
Railways (AC) tickets 5%
Non-Ac restaurant without liquor license 12%
AC restaurant with liquor license 18%
Movie tickets bellow Rs. 100/- 18%
Movie tickets above Rs. 100/- 28%
5 Star hotels 28%
Airlines (Business Class)
18%
To know the detail information on the
GST tax slab (for goods ) you can download this pdf file Download
GST tax slab (for services ) you can download this pdf file) Download
thanks for visiting our site
wish you success
shaan khan
No comments:
Post a Comment