Goods and Service Tax (GST) in India

In India , we currently have 4 major indirect tax laws (not including customs la
w) :
1.State VAT (Value added TAX) - For any sales within the state.This tax varies f
rom state to state.
2.Central sales tax (CST) - For inter-state sales
3.Excise Duty - This is the tax on manufacturing.
4.Service tax - On all services except some of the exempted services.
If anyone wants to know about exempted services in services they can refer to th
e link below:
http://www.dateyvs.com/tax/service-tax/taxability-of-a-service/exemptions-in-ser
vice-tax/
The major aim to introduce GST is to eliminate all the indirect tax laws and int
roduce a single tax in place of them for both goods and services.This would mean
administrative convenience for the government and tax payers. The tax payers on
which all of the above 4 mentioned taxes applied had to file different returns
for each of them in respective departments . This would reduce the burden on the
taxpayer.
To summarize, Goods and service tax is a system of taxation where there is a si
ngle tax in the economy for all goods as well as services.This is meant to bring
together all the state economies and create a single taxation system for all go
ods and services. When GST will be introduced , it will eliminate the need of in
direct taxes.
Fact:France was the first country to introduce GST.
Let us try to understand this more by an example :
Whenever you go to a restaurant for having lunch/dinner , you might have noticed
that the there are couple of taxes applied on the bill and we often do not calc
ulate or bother about the taxes , we just look at the amount food items ordered
and pay the bill. And if anyone of you have noticed these taxes also vary across
the states. In Mumbai, you may be charged at around 25-30% tax and same meal in
same restaurant in Jaipur you might be charged around 20% this makes the whole
system for the central government complicated for tax collection as well as refu
nd.Also this leaves a space for corruption or tax evaders wherein you may not as
k for the bill from the restaurant just to avoid taxes. This happens a lot at th
e Small Kirana stores at some places. Just imagine what would happen if a single
tax is introduced all across . There would be ease in administrative system and
government will be able to function smoothly. This is what GST is all about.
Now answers to some important questions :
1.What are the categories exempted from GST ?
Exports will not be subject to GST. Direct taxes, such as income tax, corporate
tax and capital gains tax will not be affected.
2.How will GST benefit the economy?
It will simplify India's tax structure, broaden the tax base, and create a comm
on market across states.
This will lead to increased compliance and increase India's tax-to-gross domest
ic product ratio. According to a report by the National Council of Applied Econ
omic Research, GST is expected to increase economic growth by between 0.9 per c
ent and 1.7 per cent. Exports are expected to increase by between 3.2 per cent
and 6.3 per cent, while imports will likely rise 2.4-4.7 per cent, the study fo
und.
3.How will GST benefit the corporates ?

It would be beneficial for corporates as the average tax burden on the companie
s will fall.Reduction in production costs will make exports more competitive whi
ch would be good for a country like India.
4.Will the goods and services become costly?
The answer is "No" . Because the rate of taxation under GST would be around 15%
. In comparison the current rate from all the indirect taxes is around 20 % so g
oods will not become costlier . They might even become cheaper.
That's all from my side. Any other thing which you want to know about GST you ca
n please comment on this post . I will try and answer the question.
Posted by Yash Bansal at 11:34 PM 4 comments:
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Monday, December 22, 2014
New proposed toll tax policy for India
Road ministry has proposed to exempt buses and private cars from the toll across
the country.
Only commercial vehicles will be charged tolls.
Let's start with some facts before we start with the opinions :
1.In India , commercial vehicles contribute about 86% of total toll tax revenues
, while private vehicles contribute to about 14% of toll tax revenues in India.
To be precise the data for the year 2013-14 was Rs.9800 crore from commercial v
ehicles and Rs.1600 crore from the private vehicles.Total revenue collected in I
ndia in 2013-14 was Rs.11,400 crore.
2.It is projected that government will suffer a loss of about 27,000 crore in th
e next five years if the above stated policy is applied.To balance this , Road m
inistry has proposed 3 measures which are as follows:
a.Increase the cess on petrol and diesel from existing Rs2 to Rs.3.(Cess is
kind of a TAX)
b.Levy a one-time fee of 2% on the purchase of new personal vehicle
c.One-time fee of Rs.100 on existing personal vehicles.
All the measures stated by the Road ministry will help government to earn about
Rs.32,600 crore (an estimation) as against the loss of Rs.27,000. So , the gover
nment will be in profit.
In my view, this is a very good step as it would lead to less congestion on the
road which is the problem in most of the metropolitan cities in India. Other poi
nt is that the excess income can be used to maintain the roads which is the majo
r problem faced by transportation system in the country.
Any other views Guys !! Now the forum is open for discussion we can have discuss
ion about it in the comments section below !!!
Posted by Yash Bansal at 10:18 AM 3 co