Goods and Service Tax (GST) replaced all indirect taxes levied on goods and services by the Government, both Central and States. GST is one of the biggest Tax Reforms in India since its independence. With the implementation of GST Law, a major milestone has been achieved towards ease of doing business. In the light of the above developments, industry would now need to analyze the provisions of the law in detail, and examine its impact on their business. This is essential to ensure that timely representations are made to the Government, as well as to identify key implementation requirements as part of the preparations for transition from the existing indirect tax regime to GST regime. check more details for "GST A Driver of Growth Engine for the Nation" from below...
GST A Driver of Growth Engine for the Nation
What is GST ?
GST is basically an indirect tax that brings most of the taxes imposed on various goods and services at the point of manufacture, sale and consumption of goods and services under one umbrella at the National level. While in Pre GST Era, taxes were levied separately on Goods and Services.i) Simplification in Tax System:
Pre GST Era, Central Taxes like Central Excise Duty, Special Additional Custom Duty (SAD), Additional Custom Duty (CVD), Additional Excise Duty, Service Tax, Taxes on lottery, betting and gambling. State Taxes like VAT/ sales Tax, Entertainment Tax, Luxury Tax, Entry Tax in place of octroi, Electricity duty. All above various taxes under Central Government are now subsumed in CGST and While State taxes are now subsumed in SGST.ii) Record Keeping :
With introduction of GST, various records / formats need not to be maintained to make a compliance under various Acts & Laws like in the Pre GST regime. It result in saving of time / paper work and Staff member will devote their time on some other important activity from Organisation perspective. iii) Elimination of Multiplicity of Taxes and their cascading effects : One of the Key benefit from GST is removal of the cascading tax effect. In simple words removal of Tax on Tax. Below example shows the net saving from cascading tax effect.Particulars | Pre GST Rs. | Pre GST Rs. |
Sale Price | 1000 | 1000 |
Excise Duty @12.5 % | 125 | 0 |
Sub Total | 1125 | 1000 |
VAT @ 5.5% | 61.88 | 0 |
CGST @ 9% | 90 | |
SGST @ 9% | 90 | |
Total | 1186.88 | 1180 |
Cascading effect | 6.88 |