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r GST is stands for Goods and Service Tax.

r GST would be levied on all the transactions of goods and services made for a consideration. This new
levy would replace almost all of the indirect taxes. In particular, it would replace the following indirect
taxes:
r At Central level
r Central Excise Duty
r Service Tax
r Additional Excise Duties
r Excise duty
r VAT
r Excise Duty levied on Medicinal and Toiletries preparations,
r Surcharges and cesses
r Central Sales Tax
r At State level
r VAT/Sales tax
r Entertainment tax (unless it is levied by the local bodies)
r Luxury Tax
r Taxes on lottery, betting and gambling
r Surcharges
r Octroi

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 °ow GST is different from the current
taxes?
r GST is different from the current tax structure in many ways. Currently, taxes treat goods
and services differently. , ͚goods͛ attract Excise at manufacturing level and VAT at the time
of sale. In contrast, services attract only one levy i.e. Services tax on provision of taxable
services.

r This distinction, in GST regime, would loose its importance as both goods and services
would be treated as par for taxing purposes. A transaction in goods and services for a
consideration would attract CGST and SGST. Also, the State Government now gets the
power to tax services and Central Government gets the power to levy tax at the
distribution and retail level.

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 hen and °ow?
hen would GST be introduced?
r As the news are unfolding, the proposed date April 2010 for implementing GST seems
unlikely. °owever any date near October 2010 or April 2011 seems unikely.

hat about the legislations and the

rules?
r GST would be implemented with single CGST statute which would be applicable across India.
°owever, for SGST, each state will have its own statute. At present, the Government is working on
the draft legislation and the rules.

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 Ôenefits and Future
hether exports and SEZ would benefit?
r Exports would be zero rated, as currently they are. In case of SEZ, if the supply of goods or services is for
consumption in processing zone then it would be zero rated. Supply of goods and services from SEZ to
domestic are would be treated as domestic transaction and taxed.

hat would be the rate?

r The Government is yet to freeze on the rates. As per the various news reports, the rate would be around
8% for CGST and 8% for SGST. °owever, the 13th Finance Commission has suggested a rate of 5% CGST
and 7% SGST.
r There would be a lower rate for goods of special importance and a standard rate for other goods. Also,
precious metal would have special rate. °owever, services will have single rate for CGST and SGST.

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 Ôenefits and Future Contd..
hat should the businesses do? MAIN POINTS
The business should: |*+,-,*+ .&&(/+0/+1 ,22
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