What is GST?
Ø GST is a comprehensive value added tax on good and service.
Ø It is Collected on value added at each stage of sale or purchase in each supply chain
Ø No differentiation between goods and services as GST is levied at each stage in the supply chain.
Ø Seamless input tax credit throughout the supply chain.
Ø At all stages of production and distribution taxes are a oss through and tax is borne by the final consumer
Why GST?
Ø Simple Structure of Tax
Ø Only one or two rate of tax or duty
Ø Increased in collection of Revenue
Ø Less transaction cost
Ø Only one return
Ø 100% tax credit possible
Example:
At present After GST
Manufacture
Goods 10000.00 Goods 10000.00
ED(10%) 1000.00 GST(10%) 1000.00
Sale value 11000.00 Sale value 11000.00
Wholeseller
Cost 11000.00 Cost 11000.00
Vat(4%) 440.00 GST 1100.00
Sale value11440.00 (-)Tax Credit 1000.00
Sale value 11100.00
Challenge Aheads
Ø Sharing Ratio of revenue between Central Govt. and State Govt.
Ø Rate of Tax to be imposed
Ø Integration of large number of Central and State Tax – Multiple of Tax and tax rates.
GST – GLOBAL SCENARIO
Ø More than 140 countries have been already use GST System
Ø Most of countries have Single rate system
Ø But in Canada and Brazil have dual rate system
Ø Standard rate of GST is 15- 20 %
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