Download - Shruti GOODS AND SERVICE TAX
-Shruti Agrawal
GST
122 Amendment
Alcohol, tobacco,
petroleum products are exempted.
Will subsumes various central
and state indirect taxes.
Introduced in lok sabha
GOODS AND SERVICE TAX• The GST is basically an
indirect tax that brings most of the taxes imposed on most goods and services, on manufacture, sale and consumption of goods and services, under a single domain at the national level.
• The simplicity of the tax should lead to easier administration and enforcement.
• Free movement of goods from one state to another.
Tax structure
Indirect Tax
Inter-state
CGST(central)
SGST(state)
Intra-state
IGST(central)
Direct Tax
Income Tax
Proposed tax structure (GST)
How it works
Current Tax System:
100 130 150
208.23(150+58.23)
(Customer)
(10 + 13 + 16.30 + 18.93 = 58.23)
(Tax imposed)
How it works
GST:
100 130 150
166(160+6)
(Customer)
(10 + 3 + 2 + 1 = 16)
(Tax imposed)
Prime model of
GST
Central GST State GSTDual
(Canada)
Model of GST
GST Around the WORLD• France was the first to introduce GST.
• Only Canada has dual GST model(Just like India is going to implement Dual GST Model).
• Rate of GST ranges between 15–20% generally(may differ to higher/lower side in few countries).
• Around 160 countries have GST.
GST Rates:
Growth in GDP:
Dual GST:• Dual GST is a type of GST in which both centre
and state governments will levy GST separately.
• Dual GST is preferred in countries where there is a federal structure of the government.
• In India, due to non consensus between central and state government, the proposal is to introduce a Dual GST regime i.e. Central and State GST.
• The GST is expected to foster increased efficiencies in the economic system thereby lowering the cost of supply of goods and services.
CGST
SGST
IGST
Components
Mechanism:Case 1: Sale in one state, resale in the same state
Mechanism:Case 2: Sale in one state, resale in another state
Mechanism:Case 3: Sale outside the state, resale in that state
Advantages
Effective use of resources
Industrial growth
Less price
More revenue
Estimated increase in GDP by 0.9%-1.7%
Fewer Taxes
Increase in GDP
Disadvantage
Confusion and mistrust
Add upt0 8% on cost of house.Reduce in demand
CGST and SGST are another name of service tax value added tax etc.
Easy to say than done.
Hurdles
Extensive Training to Tax Administration Staff
Robust IT Network
Threshold Limit in GST
Revenue Neutral Rate (RNR)
Consent of States
Passing of Bill in Rajya Sabha
Conclusion:• India is a developing country and GST
is one of the biggest reforms after independence.
• After careful study and by taking specific steps to resolve the problems, GST can turn out to really helpful and turning point in Indian history.
THANK YOU..!!