Friday 9 December 2016

Posted by Howzto
No comments | 17:35

GST is one indirect tax for the whole nation, which will make India one unified com¬mon market.
GST is the single tax in the supply of goods and services , right from the manufactur¬er to the consumers. Credits of the input taxes paid at each stage will be available in the subsequent stage of value addition, which means GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefit at all the previous stages.
Ensuring availability of input credit across the value chain.
Minimising cascading effect of taxation.
Simplification of tax administration and compliance.
Harmonisation of tax based laws and administration procedures across the country.
Increasing the tax base and raising compliance.
Prevention of unhealthy competition among states.
Easy compliance.
Uniformity of tax rates and structures.
Removal of cascading.
Improved competition.
Gain to manufacturers and exporters.

At the central level the following taxes are being subsumed :
Central excise duty
Additional excise duty.
Service tax
Additional custom duty commonly known as countervailing duty
Special additional duty of customs.

At the state level the following taxes are being subsumed :
> Subsuming of the state value added tax/ sales tax.
> Entertainment tax (other than the tax levied by the local bodies), central sales tax (levied by the centre and collected by the states).
> Octroi and entry tax.
> Purchase tax.
> Luxury tax
> Taxes on lottery, betting and gambling.

GST would be administered in India, The federal structure of India , there will be two components of GST - Central GST and State GST. Both will simultaneously levy GST across the value chain. Tax will be levied on every supply of goods and ser¬vices. Centre would levy and collect the state goods and service tax on all transac¬tions within a state. The input tax credit of CGST would be available for discharging the CGST liability on the output at each stage.
Similarly the credit of CGST paid on input would be allowed for paying the SGST on output. No cross utilization of credit would be levied simultaneously. On every trans¬action of supply of goods and services except on exempted goods and services goods which are outside the preview of GST and the transaction which are below the prescribed threshold limits. Further, both would be levied on the same price or value unlike state VAT which is levied on the value of the goods inclusive of central Ex¬cise.


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