GST is the indirect tax imposed on goods and service it includes central excise duty, service tax, state value added tax, octroi and entry tax. It also says a VAT.
GST is the indirect tax which imposed on products. It is only one tax levied on value adding in a product. It is the tax which is including one and more tax on products.
It is levied on a supply of goods & service from manufacturer to customer by the government. GST is chargeable by the last dealer of the product.
It is bearing the GST from the user of the product & service.
How to benefited GST in the interest of the business/industry, government, and customers?
A Business /industry
The GST is usable to the industry. The industry has to less cost of payment of the taxes. So, it can use in another way; the industry can make the growth of the sector quickly. It makes easy feeding to the business toward growth.
Unity in tax slab and texture:
GST is a single tax levied on a supply of goods and service from manufacturers to customers. So, the way the GST designed the manufacturer need not remind different tax slab rates.
There is also confusion does not arise at the tax payment time. If the taxes related to the products are neutral, the business person can easily establish and managing their business.
Removal of cascading
It is saving a business person from a hidden tax. So, by this way, the price of the product and services seems at a low price.
Making improvements in competitiveness
The GST is including one and more taxes in the one i.e. GST. That way, the manufacturer makes improvements in their business competitiveness.
By the using GST, the manufacturer and exporter make more export and sales their product in international market. They can expand their business in international markets.
The government (central and state)
It is easy to an administration of tax earning of indirect taxes. A Government can easily administrate it both central and state government.
Better control of a leakage:
GST is the tax which is using into the country. The economy can make growth into different sectors, and it is taking care of IT infrastructure and try to strengthen to IT infrastructure.
To increase revenue:
By the GST, The government’s expenses are getting low. The government can make efficient profit generation. Because of the tax collection expense reduces by it. It comprises one and more than taxes into GST.
Decrease price of the product
GST consists of more taxes into one. Because of the GST, the taxes levied on product & services go lower. That way, the price of the product is getting less.
Less Tax burden
By the using GST is the one place for different taxes. It is getting less tax burden to the people. And also a price of the product is also got less by implementing GST.
Which taxes are including into GST at the different level?
At the central level:
1) Central excise duty
2) Additional excise duty
3) Service tax
4) Countervailing tax
5) Special addition duty of customs
At the state level
1) State value added tax/ sales tax
2) Entertainment Tax
3) Octroi and entry tax.
4) Purchase tax
5) Luxury tax
6) Taxes on lottery, betting, and gambling
How does it work?
GST comprises at three different ways i.e. IGST, CGST, SGST.
IGST is an integrated GST which is imposed by central government on an inter-state transaction. CGST is a central GST which is levied by central government SGST is a State GST which is levied by a state government.
IGST is calculating three taxes i.e. IGST, CGST, & SGST.
CGST is calculating two taxes i.e. SGST and IGST.
SGST is calculating two taxes i.e. CGST and IGST.
Suppose you want to do an inter-state transaction. Now, you calculate the VAT.
Suppose your product price is 1000 Rs. consider VAT for the product. Then 10% of 1000 Rs. i.e. 100 Rs is taken by the state.
+ VAT @ 10%= 100
Cost of the product = 1100
You are taking 1000 Rs. Profit on the product. Then the price of product
Cost of the product = 1000 Rs.
+profit= 1000 Rs.
SELLING PRICE= 2100 rs.
Now, you need to pay CST to the central government. The tax rate of central sales tax i.e. 10% of selling price= 210 Rs.
SELLING PRICE= 2100 Rs.
+ CST @ 10% = 210 Rs.
Selling price = 2310 Rs.
Now selling price is 2310 Rs.
But if you calculate GST on the same product then, it is less price from the VAT.
Now, consider GST for the same product.
Cost of the product = 1000
+ CGST @ 5%= 50
+ SGST @ 5%=50
Cost of the product= 1100
Now, the profit calculated on the product i.e. 1000 Rs.
The cost of the product = 1100
+ Profit of the product = 1000
+ IGST @ 10% = 110
Selling price of the product= 2210
See, there is a difference of Rs. 100 on the product. so, that way GST is better than VAT.
on 24th March, there are the FM Arun Jetly passes a GST bill in Parliament. There is four supplementary legislation passes on that particular day.
Four Legislation was declared in Parliament.
CGST Bill 2017
IGST Bill 2017
UTGST Bill 2017
But, the government will impose GST from 1st July.
The GST Bill consists more beneficial from the old taxation systems.
The GST is merged all indirect taxation into single tax at state level and central level.
The GST Bill is imposing GST on Manufacturing Process, Sale of the products, and Consumption of any Goods & Services in whole country.
GST is Encouraging concept of common market for all products in a country. It is also helpful in to less the tax burden on consumers.
It is regulated by GST council which is owned by FM Arun Jetly. It is helpful in to decrease the price of the Goods and services.
The GST is toughest to apply but, when it is applied it is making easier for tax payer to pay taxes. It is showing uniformity in rate of taxes.
The GST council is preparing four Equal tax slab rates for Indirect taxes i.e. 5, 12, 18, and 28 percentages on different products and services. And additional cess will levied on different demerit goods and services. The demerit goods include Luxury things, alcohol, Tobacco, ghutka.
Food items and petroleum are excluding from GST. The GST council is pending a decision on minor who is keeping Alcohol.
In the GST, the government is added some centralise indirect taxes and also state level indirect taxes.