CA Gagandeep Singh Kochar
“Goods and Services Tax” would be a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India, to replace taxes levied by the Central and State governments.
GST is a tax that we need to pay on supply of goods & services. Any person, who is providing or supplying goods and services is liable to charge GST.
GST is a consumption based tax/levy. It is based on the “Destination principle.” GST is applied on goods and services at the place where final/actual consumption happens.
Models of GST
Expected model of GST in India:
In India, the GST model will be “dual GST” having both Central and State GST component levied on the same base.
For example, if a product have levy at a base product of Rs. 1000 and the rate of CGST and SGST are 10% then in such case both CGST and SGST will be charged on Rs. 1000 i.e. CGST will be Rs. 100 and SGST will be Rs.100.
The significant features of Dual GST are as under:
Further, State Excise on liquor may also be kept outside the GST.
As per the proposed GST regime, the input of Central GST can be utilized only for the payment of CGST and the input of State GST can be utilized only for payment of SGST.
Subsuming of Existing Taxes
|Sl. No.||Subsumed under CGST||Subsumed under SGST|
|1||Central Excise Duty||VAT / Sales tax|
|2||Additional Excise Duties||Entertainment tax (unless it is levied by the local bodies).|
|3||Excise Duty-Medicinal and Toiletries Preparation Act||Luxury tax|
|4||Service Tax||Taxes on lottery, betting and gambling.|
|5||Additional CVD||State Cesses and Surcharges (supply of goods and services)|
|6||Special Additional Duty of Customs – 4% (SAD)||Entry tax not in lieu of Octroi|
What will be out of GST?
Benefits of GST implementation
GST rate Worldwide
GST rates of some countries are given below.
|Country||Rate of GST|
^ Proposed rate.
The taxation of goods and services in India has, hitherto, been characterized as a cascading and distortionary tax on production resulting in mis-allocation of resources and lower productivity and economic growth.
Under the new structure, all different stages of production and distribution can be interpreted as a mere tax pass-through, and the tax essentially ‘sticks’ on final consumption within the taxing jurisdiction.