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GST Implementation in India: Goods And Services Tax, Key Highlights

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GST Implementation in India

On 1st July onwards, GST Implementation in India will come into force and sees the light of the day. Government of India again pronounced that the nation-wide Goods and Services Tax (GST) will be rolled out on July 1. GST will be a broad circumlocutory tax on consumption of goods and services throughout India which means it would be charged and collected on every sale or purchase of goods or services. It derives One Nation, One Tax vision of the Modi-led government. GST is a game-changing move for every businessman as well as for the customers. The whole environment will change on the implementation of GST and its acceptance. People are worried whether there will be an increase or decrease in price of the goods after implementation of GST.

The changes have been taken place in GST as if you go the kirana store early next week to get the full month's grocery then the chances are that the store owner will tell you there is not enough stock of some of the goods which you want to buy. It provides to changes the current tax structure, reduce procedural hurdles, increase the tax base, reduce tax avoidance, and bring down the final cost of goods and services to benefit businesses, consumers, and the government. Certain sections of the industry in India demanded to deferment of GST rollout but it will definitely apply from 1st July. For collecting the additional details regarding the Goods And Services Tax Key Highlights, you are advised to go through the page which is well furnished by the team of www.privatejobshub.in

GST Implementation in India

As the country gets ready for the midnight launch of Goods and Services Tax (GST) on July 1, Supply of goods and services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person.

On 12 April 2017, the Central Government enacted four GST Bills:
  • Central GST (CGST)
  • Integrated GST (IGST)
  • Union Territory GST (UTGST)
  • Bill to Compensate States
GST Government Regulations-
  • GST laws,
  • GST Rules,
  • Tax rate structure including Compensation Cess,
  • Classification of goods and services into different rate slabs,
  • Exemptions,
  • Thresholds,
  • Tax administration
GST Rates:

Exempt
5%
12%
18%
28%
28% + Cess
Food grains
Cereals
Milk
Jaggery
Common Salt
Coal
Sugar
Tea & Coffee
Drugs & Medicine
Edible Oil
Indian Sweets
Fruit Juices
Vegetable Juices
Beverages containing milk
Bio-gas fuel
Fertilizers
Capital goods
Industrial intermediaries
Hair Oil
Soap
Toothpaste
Air conditioner
Refrigerators
Small cars (1% / 3% cess)
 Luxury cars (15% cess)
  • Four tax bands between 5 per cent and 28 per cent.
  •  Two standard rates - 12 per cent and 18 per cent.
  • Sevices may turn costly if 18 per cent slab is applied.
  • Luxury goods to be taxed at between 40 per cent and 65 per cent.
  • White goods/consumer durables to be taxed at 28 per cent.
  • States to be compensated for revenue losses through cess route, but with sunset clause of five years.
  • Some commodities that would fall under 28 per cent slab may face higher tax than at present.

Rate Classification for Services:

Exempt
5%
12%-18%
28%
  • Education
  • Healthcare
  • Residential accommodation
  • Hotel/ Lodges with tariff below INR 1000
  • Goods transport
  • Rail tickets (other than sleeper class)
  • Economy class air tickets
  • Cab aggregators
  • Selling space for advertisements in print media
  • Works contract
  • Business Class air travel
  • Telecom services
  • Financial services
  • Restaurant services
  • Hotel/ Lodges with tariff between INR 1000 and 5000
  • Cinema tickets
  • Betting
  • Gambling
  • Hotel/ Lodges with tariff above INR 5000
  • GST rate on pearls, precious or semi-precious stones, diamonds (other than rough diamonds), precious metals (like gold and silver), imitation jewellery, coins – 3%
  • GST rate on rough diamonds – 0.25%
GST Impact on Business:


Benefits of GST:

There are various advantages of Goods and Services Tax such as wider tax base, necessary for lowering the tax rates and eliminating classification disputes. Removal of diversity of taxes and their cascading effects, Rationalization of tax structure and simplification of compliance procedures. Harmonization of center and State tax administrations, which would reduce duplication and compliance costs. Automation of compliance procedures to reduce errors and increase efficiency

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Taxes to be subsumed:

Central Taxes
State Taxes
  • Central Excise Duty [including additional excise duties, excise duty under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955]
  • Service tax
  • Additional Customs Duty (CVD)
  • Special Additional Duty of Customs (SAD)
  • Central Sales Tax ( levied by the Centre and collected by the States)
  • Central surcharges and cesses ( relating to supply of goods and services)
  • Value Added Tax
  • Octroi and Entry Tax
  • Purchase Tax
  • Luxury Tax
  • Taxes on lottery, betting & gambling
  • State cesses and surcharges
  • Entertainment tax (other than the tax levied by the local bodies)
  • Central Sales Tax ( levied by the Centre and collected by the States)

Latest GST in India is expected to make things easier and downsize the current circuitous tax command, remove tax cascading and put the Indian economy on high-growth course. The GST Council is also empowered to decide how to resolve disputes arising out of its recommendations.


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