GST

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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