Goods & Service Tax (GST India) : Latest News & Analysis on GST
Goods and Service Tax
The much talked about G.S.T (Goods and Service Tax) is a value added comprehensive indirect tax levied on manufacture, sale and consumption of goods as well as services at the national level. It would be a collective tax which will replace all the sub taxes levied in goods and services by the Central and State Governments. France was the first country to implement the G.S.T, but presently there are about 160 countries which have implemented the G.S.T. According to the G.S.T concept, goods and services will be subjected to a uniform tax rate and both would be given importance at par.
Once introduced, it will replace a number of indirect taxes like, VAT, Service tax, Excise, Purchase tax etc. Therefore, this unique system of tax is a more simplified version of the present tax regime. This new tax rates would have an impact on everything we buy from movie tickets to phone bills to restaurant visits to salon, etc. It is reported that telecom services would attract a service tax of 18%. Restaurants in 5-star hotels will have the highest tax slab of 28%. 2% on gross domestic products is levied.
Finance Minister, Mr. Arun Jaitley who chairs the G.S.T council has no doubt about taking such a bold step to bring about a change in the Indian Tax System. Reports say that everyone- from manufacturer to the end consumer- stands a gain from it. The biggest gainers would include the cement manufacturing companies, pharmaceuticals, banks, automobile industry, consumer durable goods, fast moving consumer goods, information technology and the capital goods.
G.S.T’s benefits:-
- Manufacturing becomes cheaper and produces imports.
- As the demand for goods increases due to lower costs of products, employment would be increased.
- Removal of certain state restrictions.
- Input tax credits will encourage supplier to pay taxes.
- Price of the fast-moving consumer goods expected to fall.
- Creates a common market with a single tax which will make sure every citizen is fulfilling the duty of paying tax.
- Unlike income tax G.S.T is an unavoidable tax.
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