Debate on gst in favour. Pls tell
First of all I would like to tell you about GST.
- Good and Services Tax (GST)- The Goods and Services Tax (GST) has been heralded as the biggest indirect tax reform in India after Independence. After much deliberation, the GST bill has been passed in the Rajya Sabha and is set to be discussed in the state legislative assemblies in this winter session. With the ball set to roll for a unified country-wide tax reform, the market is filled with new found optimism among industry leaders and government officials.
This sets the necessary momentum for the passage of the two Bills—Central GST (CGST) and Integrated GST (IGST) Bills—during the winter session along with the State GST Bill by different state assemblies. According to industry experts and government sources, the GST roll out date of April 1, 2017 is likely to be met. With this, enterprises, particularly SMEs, across a wide range of industries are caught in a state of flux. The comprehensive indirect tax GST will replace various other taxes such as Excise, Vat and Service Tax with a single tax structure. Driven by wide-ranging skepticism, several startups and SMEs are wary of the adverse impacts that may come into the picture with the GST roll out. According to various state governments the GST regime will benefit SMEs the most. As opined by industry experts, the much proclaimed benefits of eliminating the cascading effect of multiple central and state taxes and the ease of starting a business will impact them the most. However, market optimism aside, they are not very sure of the ways the new tax regime will affect their business and alter their bottom line. To comprehend the full repercussion of the tax reform, it becomes crucial to know the intricate aspects of GST and the associated tax reform in detail.
- The Objectives of GST, it’s implementation and Impact will make you clear that it’s good or bad-
The tax revenue mix can change as per the economic condition of the country. In developing countries, indirect taxes comprise a higher share of total taxes; in developed countries, their contribution is significantly lower.
1. Petroleum products
2. Entertainment and amusement tax levied and collected by panchayat /municipality/district council
3. Tax on alcohol/liquor consumption
4. Stamp duty, customs duty
5. Tax on consumption and sale of electricity
1. Ensuring availability of input credit across the value chain
2. Minimizing cascading effect of taxation
3. Simplification of tax administration and compliance
4. Harmonization of tax base, laws, and administration procedures across the country
5. Minimizing tax rate slabs to avoid classification issues
6. Prevention of unhealthy competition among states
7. Increasing the tax base and raising compliance.
1. Lack of adaptation
2. Lack of trained staff
3. Double registration can increase compliance and cost
4. Lack of clear mechanism to control tax evasion
5. Hard to estimate the exact impact of GST.
For more knowledge regarding Implementation click here.
Impact on inflation:-
Under the proposed GST, effective tax rate on goods (comprising around 70-75 per cent of the CPI basket) will decline.
A significant proportion (35-40 per cent) of goods (majorly agriculture products) are not subject to tax and we expect a status quo in future.
At present, services-oriented components constitute ~25-30 per cent of the CPI basket with a major share belonging to housing, transport and communication sector. Service tax is not imposed on certain (12 per cent of the CPI basket) services and these services are expected remain exempt under GST regime. A hike in tax rate on services is unlikely to have any material direct impact on CPI. For more knowldege about the impact of GST