Salient Features of GST | Scope of Goods and Services Tax in India, FAQs

Salient Features of GST

The President of India approved The Constitution Amendment Bill for Goods and Services Tax (GST) which is one indirect tax for the entire country to make India one unified common market. The Salient Features of GST discussed here will definitely explore the Scope of Goods and Services Tax in India. Goods and Services Tax (GST) is one of the very vital moves towards indirect tax reforms in India. The Govt of India is aimed to exchange the entiretaxes levied on goods and servicesby the Centre and States and implement GST by April 2017. 

By merging the huge number of Central and State taxes into single taxes into a single tax,it would relieve falling or twofold tax collection significantly and make ready for a common national market. From the customer perspective, the greatest advantage would be regarding a lessening in the general taxation rate on products, which is as of now assessed to be around 25%-30%. Introduction of this tax would likewise make Indian products competitive in the household and global markets.

Salient Features of GST that reveals Scope of Goods and Services Tax in India

  1. GST would be appropriate on “supply” of merchandise or services as against the present idea of tax on the goods of products or sale of goods or on arrangement of administrations.
  2. GST would be founded on the standard of goal based utilization tax collection as against the present rule of origin based tax assessment.
  3. It would be a double GST with the Center and the States at the same time exacting it on a typical base. The GST to be collected by the Center would be called Central GST (CGST) and that to be required by the States [including Union domains with legislature] would be called State GST (SGST) [Union regions without assembly would exact Union region GST (UTGST)].
  4. An Integrated GST (IGST) would be required on between State supply (counting stock exchanges) of products or administrations. This would be gathered by the Center so that the credit chain is not disturbed.
  5. Import of goods or services would be dealt with as inter-State supplies and would be liable to IGST notwithstanding the appropriate customs duties.
  6. CGST, SGST/UTGST and IGST would be required at rates to be commonly settled upon by the Center and the States under the aegis of the GST Council (GSTC).
  7. GST would replace the following taxes currently levied and collected by the Centre:
    • Central Excise duty
    • Duties of Excise (Medicinal and Toilet Preparations)
    • Additional Duties of Excise (Goods of Special Importance)
    • Additional Duties of Excise (Textiles and Textile Products)
    • Additional Duties of Customs (commonly known as CVD)
    • Special Additional Duty of Customs (SAD)
    • Service Tax
    • Cesses and surcharges in so far as they relate to supply of goods or services
  1. State taxes that would be subsumed within the GST are:
    • StateVAT
    • Central Sales Tax
    • Purchase Tax
    • Luxury Tax
    • Entry Tax (All forms)
    • Entertainment Tax (except those levied by the local bodies)
    • Taxes on advertisements
    • Taxes on lotteries, betting and gambling
    • State cesses and surcharges in so far as they relate to supply of goods or services
  2. GST would apply to all products and services except from Alcohol for human utilization.
  3. GST on five determined petroleum items (Crude, Petrol, Diesel, ATF and Natural gas) would be relevant from a date to be suggested by the GSTC
  4. Tobacco and tobacco items would be liable to GST. Also, the Center would keep on levying Central Excise duty.
  5. A typical edge exception would apply to both CGST and SGST. Taxpayers with a yearly turnover of Rs. 20 Lakhs (Rs. 10 Lakhs for extraordinary class States) would be excluded from GST. An aggravating alternative (i.e. to pay impose at a level rate without credits) would be accessible to little citizens (counting to determined class of producers and specialist co-ops) having a yearly turnover of uptoRs. 50 Lakhs. The limit exception and aggravating plan would be discretionary.
  6. The rundown of exempted goods and services would be kept to a base and it would be orchestrated for the Center and the States and additionally crosswise over States beyond what many would consider possible
  7. Exports would be zero-rated.
  8. Credit of CGST paid on inputs might be utilized just to pay CGST on the result and the credit of SGST/UTGST paid on information sources might be utilized just to pay SGST/UTGST. As such, the two surges of info assessment credit (ITC) can’t be cross used, with the exception of in indicated conditions of between State supplies for installment of IGST. The credit would be allowed to be used in the accompanying way…
    • ITC of CGST allowed for payment of CGST & IGST in that order;
    • ITC of SGST allowed for payment of SGST & IGST in that order;
    • ITC of UTGST allowed for payment of UTGST & IGST in that order;
    • ITC of IGST allowed for payment of IGST, CGST & SGST/UTGST in that order.
    • ITC of CGST cannot be used for payment of SGST/UTGST and vice versa
  1. Records would be settled occasionally between the Center and the State to guarantee that the credit of SGST utilized for installment of IGST is exchanged by the Exporting State to the Center. Essentially the IGST utilized for installment of SGST would be exchanged by the Center to the Importing State. Promote the SGST part of IGST gathered on B2C supplies would likewise be exchanged by the Center to the Destination State. The exchange of assets would be done on the premise of data contained in the profits documented by the citizens.
  2. The laws, regulations and strategies for levy and accumulation of CGST and SGST/UTGST would be blended to the degree conceivable.

FAQs for Goods and Services Tax (GST)

#1. WHAT IS GST?

Answer: It is a tax exacted when a purchaser purchases goods or services. This is the manner by which what utilization is burdened in most created nations.

#2. What Is Article 246a And How Will The Power Transfer To States Take Place?

Answer: The bill presents another article that says Parliament, and, subject to a few conditions, the council of each state will have energy to make laws concerning merchandise and ventures assess forced by the Union or the state.

#3. What All Taxes Will The GST Replace As The Single Umbrella Tax.

Answer: GST would include…

Central Taxes

  • CENVAT
  • service tax
  • central excise duty
  • additional excise duties
  • excise duty levied under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955
  • additional customs duty (countervailing duty or CVD)
  • special additional duty of customs (SAD)
  • central surcharges and cesses

State Taxes

  • state VAT;
  • state sales tax;
  • entertainment tax not levied by local bodies;
  • luxury tax;
  • taxes on lottery, betting, and gambling;
  • tax on advertisements;
  • state cesses and surcharges related to supply of goods and services;
  • entry tax not levied by local bodies.

#4. Is There Any Authority Constituted Under The GST

Answer: The President would be required to constitute a Goods and Services Tax Council inside sixty days of the Act coming into compel. The GST Council might intend to build up a fit national market of merchandise and ventures. In any case, as considered prior, the new Bill has erased the arrangements that make a Goods and Services Tax Dispute Settlement Authority.

#5. In what manner WILL THE STATES RECOVER LOSS OF REVENUE

The bill takes into consideration remuneration for income misfortune to states for a time of 5 years.

#6. To Whom Does GST Apply

GST will be demanded on purchasers of products and services, or where the services are devoured. This implies huge customer states, for example, Uttar Pradesh, West Bengal and Kerala will get a high share of the expenses. To make up for this, producing states, for example, Tamil Nadu, Maharashtra and Gujarat expect that they will miss out on incomes. The bill accommodates 1 rate point additional expense on products for no less than two years. This additional income will go to the state from which the merchandise began, or where it was made.

#7.Exempted From GST?

According to the proposition the accompanying are excluded from GST

a) Supply of Alcoholic Liquor for human Consumption

The GST Council might however return to whether the exception is to be stretched out to the accompanying:

  • Petroleum Crude
  • High Speed Diesel;
  • Motor Spirit (Petrol);
  • Natural Gas;
  • Aviation Turbine

#8. Is There Any Restrictions On Imposition Of Tax On Sale Of Goods

The Constitution forces certain confinements on states on the inconvenience of duty on the deal or buy of products. The Bill corrects this arrangement to confine the inconvenience of

GST will be a transform for the Indian economy by making a common Indian market and decreasing the falling impact of assessment on the cost of merchandise and enterprises. It will affect the duty structure, impose frequency, assess calculation, charge installment, consistence, credit usage and announcing, prompting an entire update of the current roundabout expense framework.

GST will have a far-reaching impact on almost all the aspects of the business operations in the country, for instance, pricing of products and services, supply chain optimization, IT, accounting, and tax compliance systems.

GST will have a great effect on almost all the aspects of the business operations in the nation, for example, evaluating of items and administrations, store network enhancement, IT, accounting, and tax compliance systems.

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