Sunday, 7 August 2016

GST Part II continued

 Tax rate under proposed GST;

Would fall but the no. of assesses would increase by 5-6 times. Although rates would comedown, tax collection would go up due to increased tax elasticity.

The govt is working on special IT platform for smooth implementation of GST. The IT special purpose vehicle (SPV) named as GSTN(network) will be owned by three stakeholders -  The center, The state, and the technology partner NSDL.

Its probable effect on Indian economy:

GST can be a game changer. It will an effective economic reform by developing a common Indian market and reducing the cascading effect of tax on the cost of goods and services. It will have its impact on tax structures, tax computation , tax payment, compliance, credit utilization and reporting leading to a complete overhaul of the current indirect tax system.
GST will have a far reaching impact on almost all aspects of the business operations in the country, for instance, pricing of products and services : supply chain optimization; IT, accounting and tax compliance system.

Some remarkable features of the GST:

The GST shall have two important components: One levied by the Center,  and the other levied by the states. This dual GST model would be implemented through multiple statutes

The CGST and SGST would be applicable to all transactions of goods and services made for a consideration except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limit.

The CGST and SGST are to be treated sepeartely. Taxes paid against the Central GST shall be allowed to be taken as input tax credit ( ITC) for the Central GST and could be utilized only aginst the payment of SGST.

The CGST and SGST are to be paid to the a/c of the Center and states separately.  The a/c needs to be ensured whether it relates to central GST or State GST.

Cross utilization of ITC b/w the CGST and SGST would not be allowed except in the case of inter state supply of goods and services under the IGST model.

The taxpayer would need to submit periodical returns, in common format as far as possible, to both the central GST authority and to the concerned SGST authorities.

Each taxpayer would be allotted  a PAN- linked taxpayer identification number with a total of 13/15 digits. This would bring the GST PAN- linked system in line with the prevailing PAN-based system for income tax, facilitating dates exchange and taxpayer compliance.

Keeping in view the need of the taxpayer's convenience, functions such as assessment, enforcement, scrutiny and audit would be undertaken by the authority which is collecting center and the states.

Motives behind the GST: 
  • To subsume all indirect taxes at center state level.
  • To make one-country-one -tax system platform.
  • Reduce the cascading effect of taxes on taxes.
  • Increase productivity and transparency; increase tax-GDP ratio.
  • Reduce tax evasion and corruption.    
To be continued in the next part..
( Article prepared by Shruti).
Happy Reading.

No comments:

Post a Comment

Himanshu Shrivastava
A Certified Digital Marketer (By Google). and well Experianced Blogger Since 2010 .
Santosh Shrivastava
A Certified Digital Marketer (By Google) , well Experianced Blogger Since 2012 . and a Certified Security Expert .