With Goods and Services Tax (GST) bill tabled in Rajya Sabha, there are many questions which frequently pop up in the minds of the general consumers. Here is a list of questions along with their answers to satiate your queries:
1. What is Goods and Services Tax (GST)? How does it work?
The GST is a single indirect tax for the whole nation, which will make India one unified common market. It is a single tax on the supply of goods and services, right from the manufacturer to the consumer.
Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.
2. What are the benefits of GST?
The benefits of GST can be summarised as under:
— For business and industry:
* Easy compliance
* Uniformity of tax rates and structures
* Removal of cascading
* Improved competitiveness
* Gain to manufacturers and exporters
– For central and state governments:
* Simple and easy to administer
* Better controls on leakage
* Higher revenue efficiency
– For the consumer:
* Single and transparent tax proportionate to the value of goods and services
* Relief in overall tax burden
3. Which taxes at the Centre and state level are being subsumed into GST?
At the Central level:
Central excise duty, additional excise duty, service tax, additional customs duty (commonly known as countervailing duty) and special additional duty of customs.
At the state level:
Subsuming of state value added tax/sales tax, entertainment tax (other than the tax levied by the local bodies), central sales tax (levied by the Centre and collected by the states), octroi and entry tax, purchase tax, luxury tax, and taxes on lottery, betting and gambling.
4. How will GST be levied?
The Central GST (CGST) and the State GST (SGST) would be levied simultaneously on every transaction of supply of goods and services except on exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits.
Further, both would be levied on the same price or value unlike state value added tax, which is levied on the value of the goods inclusive of central excise.
5. How will imports be taxed under GST?
The Additional Duty of Excise and the Special Additional Duty presently being levied on imports will be subsumed under GST. Unlike in the present regime, the states where imported goods are consumed will now gain their share from this Integrated GST paid on imported goods.For all the latest Business News, download NewsX App