Introduction Of Gst In India

In 1954, Goods and Services Tax (GST) was introduced in France for the first time

. Today this tax has disperse over 140 countries. GST is a consumer based tax and not origin based. Under this infrastructure of GST, the tax will be assembled by the states where the goods or services originally consumed. In India, Goods and Service Tax (GST) is going to be levied from 01.04.2011. There will be a lot of inquiries in the mind of the people about GST and most of them would desire to have some clarification considering it. With the Implication GST all the other levies like CST, VAT, Service Tax and Excised Duty will be suppressed and only GST kind of tax will be cited in the Invoice. Business engaged in the sales or supply of services would be affected by GST. If you are considering goods enclosed under GST or if you are rendering any service you will be enclosed under GST.

There are two kinds of GST - Unified or Single GST and Dual GST. In India, dual GST is anticipated to be suggested wherein Central and State will be levying on the transactions of the worth of Goods or Service. In India, due to government structure, there is a suggestion to start dual GST system. Under dual GST, both the Central Goods and Service Tax (CGST) and State Goods and Service tax (SGST) will be levied on the taxable worth of the transaction. The rate is anticipated within the range of 14 to 16%. Once the total GST is confirmed the central and states have to accept on Central GST and State GST rates. There would be a single rated GST for Services and although for Goods there would be couple of rates as under:

Revenue Neutral rates

Merit Rates

Special rates for gold, silver, costly metals around 1%

Zero rate for items of social importance.

Now the question comes in our mind that whether Inter State supply of services will be subjected to GST or not? The answer is, yes. Whereas, comprehensive study considering the supply rules have been conceived and it will be a foremost challenge for the policy makers.

India, being the second most populated country in the world with a geographical locality of 3.3 million sq. kilometres with 28 States and 7 Union Territories. 30% of the whole population is illiterate and numerous locations do not have electrical power and banking facilities. Transparency International has graded India 84 out of 180 nations in the corruption index. Therefore, conceiving and applying an elegant and flawless GST in India is a tough task. A robust banking and IT infrastructure is the prerequisite easy to access GST, particularly for inter-State supplies. Minimal or no discretionary power should be vested with the tax administration to eradicate possibilities of corruption. Filing and inspection of tax returns should be on electrical devices to decrease interference between the tax administration and public. Transparency should be the thumb rule in the decision making.

by: Manilla

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