Hey all I have read some newspaper articles related to GST but couldn't get an overall picture of how it works and wat are the advantages can anyone explain in breif.t hose articles contains the only words like modi government and passed in Parliament winter session blablah
5 Replies
CA Srujann kumar Reddy
(Asst Manager(Internal audit))
(1679 Points)
Replied 04 August 2016
there is alot to say....
in simple
1) there are many taxes in india levied by central and state governments
2) to bring a single tax structure for which GST has come into picture
3) CGST has come for removing a central govt tax called excise, service tax
3) similarly state taxes like VAT & entertainment tax are removed by SGST
4) CST Will be replaced by IGST
5) there are many amendments on major procedures... and some lacunas in act are also there
6) finally a single tax will simplify tax structure of indirect taxes in india
in simple
1) there are many taxes in india levied by central and state governments
2) to bring a single tax structure for which GST has come into picture
3) CGST has come for removing a central govt tax called excise, service tax
3) similarly state taxes like VAT & entertainment tax are removed by SGST
4) CST Will be replaced by IGST
5) there are many amendments on major procedures... and some lacunas in act are also there
6) finally a single tax will simplify tax structure of indirect taxes in india
venkat
(CA )
(1518 Points)
Replied 04 August 2016
But where only one tax there are cgst sgst etc instead of service tax sales etc just name change wat is the main difference
CA Srujann kumar Reddy
(Asst Manager(Internal audit))
(1679 Points)
Replied 04 August 2016
in case of a product supply chain.....
manufacturer, wholesaler, retailer, consumer will be present,
right now manfacturer levies central excise, service tax, VAT, CST in order to supply to whole saler,
after all these taxes the cost if product to wholesaler will be 140( for example) and next when it reaches to consumer it has a great increase ( even after existing input credit mechanism)
now GST will be a single tax rate, will come and tax rate might be 18% for example then the total cascading effect will reduce to the maximum extent
and in india logistics is a very important business but however indian average of logistics is only 260 kms per day when compared with america and europe it is far less.
as logistics while moving from one state to another there are huge complainces as per the existing tax structure, GST removes those things
3) previously CST is not allowed for credit with which we have to pay more Tax now IGST is creditable and can be taken as input credit for adjustment on supply
4) VAT is not normal it will change from state to state, SGST also will have changes but the processes overall will be same
5) previously business persons has to file returns for central excise seperately, service tax, entertainment tax, VAT seperately now file CGST return to centre and SGST to state its fine
6) a single tax structure gives a better control and governance rather than monitoring multiple indirect taxes.
manufacturer, wholesaler, retailer, consumer will be present,
right now manfacturer levies central excise, service tax, VAT, CST in order to supply to whole saler,
after all these taxes the cost if product to wholesaler will be 140( for example) and next when it reaches to consumer it has a great increase ( even after existing input credit mechanism)
now GST will be a single tax rate, will come and tax rate might be 18% for example then the total cascading effect will reduce to the maximum extent
and in india logistics is a very important business but however indian average of logistics is only 260 kms per day when compared with america and europe it is far less.
as logistics while moving from one state to another there are huge complainces as per the existing tax structure, GST removes those things
3) previously CST is not allowed for credit with which we have to pay more Tax now IGST is creditable and can be taken as input credit for adjustment on supply
4) VAT is not normal it will change from state to state, SGST also will have changes but the processes overall will be same
5) previously business persons has to file returns for central excise seperately, service tax, entertainment tax, VAT seperately now file CGST return to centre and SGST to state its fine
6) a single tax structure gives a better control and governance rather than monitoring multiple indirect taxes.
venkat
(CA )
(1518 Points)
Replied 04 August 2016
So sgst for all the States is similar or each state has different sgst like Vat
CA Srujann kumar Reddy
(Asst Manager(Internal audit))
(1679 Points)
Replied 04 August 2016
now the government is trying to bring similarly.... all schedules of tax rates will be similar for all states
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