Landing the Shuttle, making a difference, GST here it goes.
To escape from the burden of paying tax several times, our parliament has introduced the GST model which has brought a ray of hope for business houses and individuals functioning in India, at present, the computation of taxes treat goods and services differently whereby, goods attract Excise at manufacturing level and Value Added Tax at the time of sale however, services attract only Service tax on provision of taxable services. This distinction, in GST regime, shall be abandoned as both goods and services would be treated to the same extent for taxation purposes.
Goods and Services Tax is a comprehensive tax levied on supply of goods and services across India. GST is a Destination based Consumption tax, whereby the taxable event is Supply as against the existing taxable events of sale, manufacture or provision of service. GST will be levied on buyers of goods and services, that is the place where goods or services are consumed.
The following points encompasses formulation and application of the the GST in 2017
1. GST after coming into force shall be applicable on supply of goods or services instead concept of tax on the manufacture or on sale of goods or on provision of services,
2. GST would be a destination based tax instead of Origin based tax,
3. The concept of dual GST is introduced with the Centre and the States simultaneously levying it on a common base. Thus the GST levied by the Centre would be termed as Central GST (CGST) and that by the States would be termed State GST (SGST),
4. CGST and SGST would be levied at rates to be mutually agreed upon by the Centre and the States,
5. Credit of CGST paid on inputs may be used only for paying CGST on the Out-put and the credit of SGST paid on inputs may be used only for paying SGST. Stating that the two streams of input tax credit cannot be connected except in specified circumstances of inter-State sales.
Keeping in mind the regularity which would be introduced after implementation of GST in India, the entire GST model is framed to achieve the following objectives,
1. To ensure the availability of input tax credit across the value chain.
2. To minimise cascading effect of taxation.
3. To simplify the tax administration and compliances thereof.
4. To harmonise the tax base, governing laws, and administrative procedures.
5. To minimise tax rate slabs to avoid classification issues.
6. To prevent the unhealthy competition between states.
The developments will significantly add fuel to the shuttle of GST regime in India. However a few segments excluded under model GST include-
a. Petroleum products,
b. Entertainment and amusement tax,
c. Tax on alcohol/liquor consumption,
d. Stamp duty,
e. customs duty,
f. Tax on consumption and sale of electricity.
Analysing the hitchhiked journey of this move of GST in my sense may have impact on globally along with bettering the condition within India, as it empowers creation of single platform for collection of taxes, eliminating the cascading effect, which would bring about ease of conducting business in India, introducing some fragment changes like the destination based consumption tax, the tax applied on inter-state and intra-state transactions, the voluminous definition of works contract, etc. may bring about a momentous change. The impact of GST may be outstretched, affecting many departments within an organisation and the transition from being non-GST compliant to total compliance can be a buttonhole, if the implementation of this legislation turns out to be a windfall then the many lives would turn from a ‘common man to a come-on-man’.