Goods and Services Tax (GST) is an indirect taxation in India merging most of the existing taxes into single system of taxation. It was introduced as The Constitution (One Hundred and First Amendment) Act 2016. The GST is governed by GST Council and its Chairman is Union Finance Minister of India Arun Jaitley.
CURRENT TAX PLAN OF INDIAN GOVT ( NON-GST )
1. Life gets simpler
GST will replace 17 indirect tax levies and compliance costs will fall
- Evasion set to drop - Input tax credit will encourage suppliers to pay taxes - States and Centre will have dual oversight - The number of tax-exempt goods will decline
3. A common market
It's currently fragmented along state lines, pushing costs up 20-30%
4. Logistics, inventory costs will fall Checks at state borders slow movement of trucks. In India, they travel 280 km a day?? compared with 800 km in the US
5. Investment boost For many capital goods, input tax credit is not available. Full input tax credit under GST will mean a 12-14% drop in the cost of capital goods. Expected: A 6% rise in capital goods investment, 2% overall.
6. Make in India
a) Manufacturing will get more competitive as GST addresses cascading of tax, inter-state tax, high logistics costs and fragmented market b) Increased protection from imports as GST provides for appropriate countervailing duty.
7. Less developed states get a lift
CURRENT TAX PLAN OF INDIAN GOVT ( NON-GST )
To understand the GST watch the video given bellow :
Impact of GST :
1. Life gets simpler
GST will replace 17 indirect tax levies and compliance costs will fall
2. Revenue will get a boost
- Evasion set to drop - Input tax credit will encourage suppliers to pay taxes - States and Centre will have dual oversight - The number of tax-exempt goods will decline
3. A common market
It's currently fragmented along state lines, pushing costs up 20-30%
4. Logistics, inventory costs will fall Checks at state borders slow movement of trucks. In India, they travel 280 km a day?? compared with 800 km in the US
5. Investment boost For many capital goods, input tax credit is not available. Full input tax credit under GST will mean a 12-14% drop in the cost of capital goods. Expected: A 6% rise in capital goods investment, 2% overall.
6. Make in India
a) Manufacturing will get more competitive as GST addresses cascading of tax, inter-state tax, high logistics costs and fragmented market b) Increased protection from imports as GST provides for appropriate countervailing duty.
7. Less developed states get a lift
The current 2% inter-state levy means production is kept within a state. Under the GST national market, this can be dispersed, creating opportunities for others
8. Manufactured goods could become cheaper Lower logistics and tax costs
9. GDP lift HSBC estimates an 80 basis point rise in GDP growth over 3-5 years.
Read more at:
http://economictimes.indiatimes.com/articleshow/53514291.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
8. Manufactured goods could become cheaper Lower logistics and tax costs
9. GDP lift HSBC estimates an 80 basis point rise in GDP growth over 3-5 years.
Read more at:
http://economictimes.indiatimes.com/articleshow/53514291.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
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