GST and its effects on industries like Manufacturing, Goods Transportation Services etc.

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GST (Goods and services Tax in India)

• The GST is one of the biggest taxation reforms
  in India which integrates State economies and
  boost overall growth. GST, or Goods and Services
  Tax, will subsume central indirect taxes like
  excise duty, countervailing duty and service tax,
  as also state levies like value added tax, octroi
  and entry tax, luxury tax. GST will unify the
  taxes into one which will remove the cascading
  effects. 
• So now with GST all these taxes will be removed.

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What is GST?

• G -Goods
• S -Service
• T - Tax
• GST Bill, officially known as The Constitution
  (122nd Amendment) Bill, 2014, would be a Value
  added Tax (VAT) to be implemented in India, from
  April 2016. GST is an indirect tax that brings
  together most of the taxes that are imposed on
  all goods and services (except a few) under a
  single banner.
• The GST, however, is a comprehensive form of tax
  based on a uniform rate of tax for both goods and
  services which is payable only at the final point
  of consumption.

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Need of GST

• Now why GST is so important for the growth in the
  economic system in India?
• India presently has a dual system of tax and
  services. The present indirect structure can be
  described in the flow chart below

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Need of GST
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Need of GST

• India needs GST to get rid of problems with the
  direct taxes. As multiple taxes like CENVAT,
  central sales tax, state sales tax, octroi, etc
  will not exist and will be replaced by GST, and
  improve tax compliances.
• The complexity in determining the nature of
  transaction, the inability of states to levy tax
  on services, lack of uniformity in provision and
  rates, complexities in administration, all could
  be withdrawn to an extent with the implementation
  of GST.
• More than 150 countries have adopted GST as it
  has the potential to raise revenue with more
  transparency and neutrality.

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There are three prime models of GST

• GST at central(Union) Government Level only
• GST at State government level only
• GST at both, Union and State Government Levels.

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Benefits of GST

• To economy
• A study by the National Council of Applied
  Economic Research estimated that roll out of the
  tax would boost the GDP growth by anywhere
  between 0.9-1.7 per cent. GST will boost up
  economic unification of India. It will assist in
  better conformity and recover risk factors in
  revenue generation and increase its flexibility. 
• To corporate
• The industries will benefit the most from the
  arrival of GST as removal of cascading taxes
  makes the manufacturing sector more competitive
  and reduces the tax compliance burden. All entry
  taxes, including octroi will be subsumed in GST
  from the start. So with no embedded tax costs on
  inter-state movement of goods (CST or entry
  taxes) under the GST regime, and shift of
  taxation to the consumer ultimately, businesses
  would have more flexibility to revise their
  supply chains process and thus, optimize
  logistics costs.

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Difficulties/Drawback of GST

• Some critics say that GST would have a negative
  impact on the real estate market. It will
  increase the cost of new homes by 8 percent to
  and reduce demand by about 12 percent.
• It is also estimated that Low and Middle income
  groups will be affected badly as the price of
  goods and services will go up with the
  implementation of GST in India.
• Some economist says that CGST, SGST and IGST are
  nothing but new names for Central Excise/Service
  Tax, VAT and CST.

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Conclusion

• The GST system is basically structured to
  simplify current indirect tax system in India. A
  well- designed GST is an attractive method to get
  rid of deformations of the existing process of
  multiple taxation.
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Contact Us Details
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Road, Near Mahalaxmi Temple, Kolhapur
416012 Maharashtra, India Phone 91 231
2620003 http//www.indiantransporters.in enquiry_at_i
ndiantransporters.in