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11 | P a g e

GOODS AND SERVICES TAX IN INDIA

Miss.Lavanya

1

, A.Balaji Ashok

2

, Afzal

3 ,

1

Head of the Dept ,

2,3

P.G Student , Department of Management Studies, Gates Institute of Technology, Gooty, A.P (India)

ABSTRACT

This paper is an analysis of the latest taxation trend in India i.e.; GST and the impact of GST in India. It is a India's biggest tax reform. After months of political wheeling and dealing , the government has won a political consensus on the much on GST bill, which passed in the Rajya sabha. The GST bill officially known as THE CONSTITUTION (one hundred and Twenty second amendment) bill ,2014 proposes a national Value added tax to be implemented in India from 1-April 2017.

GST is a indirect tax which replace several taxes in both state and central. GST is followed by several countries in the world but after 15 years struggle India has introduced. GST is aimed is to creating a single unified market by this both corporate and Indian economy are benefited.

India is a centralized democratic and therefore the GST will be implemented parallel by the central and state government respectively. Here the Central GST (CGST) and State GST (SGST).Indian system of taxation of goods and services is characterized by cascading , multiple tax on production of goods and services which leads to miss- allocation of resources , slower economic growth. To remove this hurdle, a pure and simple tax system like GST is need to the country.

GST will have a far -reaching impact on almost all the aspects of the business operation in the country, for pricing , of product and service, supply chain optimization, IT sector.

Key words : GST , Taxes, Reduce Price, No tax on tax

I INTRODUCTION

The Goods and Services Tax (GST), the biggest reform in India’s indirect tax structure since the economy began to be opened up 25 years ago, at last looks set to become reality. The Constitution (122nd) Amendment Bill comes up in Rajya Sabha .

There is no other taxes in country only one tax will levy on goods and services is called GST, for this prices will reduce because there is no tax on tax and GDP will increases .(1.O TO 1.5) . GST is a single comprehensive tax levied on goods and services consumed in an economy.

The administration of CGST to the central GST and SGST to the state GST is given. With the help of this GST we can reduction in unhealthy competition among the central and state over tax revenue.

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12 | P a g e GST :GOODS AND SERVICES ACT

MAIN SLOGAN : ONE COUNTRY - ONE MARKET - ONE TAX VOTE : 203 -0 IN RAJYA SABHA

 APPROVAL BY ALL PARTYS AND WALKOUT BY (ANNADMK) JALALITHAPARTY.

 ITS TAKEN 6 HOURS DISICUSSION

 AFTER IMPLEMENTING OF THIS TAX THERE IS NO OTHER INDIRECT TAXES.

 EASY TO TRANSPORT ONE PLACE TO ANOTHER PLACE.

 THERE IS NO NONSENCE RAIDS TO SMALL BUSINESS.

 FOR ENFORCE OF TAX THEY SHOULD GET MINIMUM OF 15 STATES ACCEPTANCE OUT OF 29 STATES.

II FEATURES OF GST

1.

One levied by the central and the other levied by the state , rates for which would be prescribed appropriately , reflecting revenue considerations and acceptability.

2.

The central GST and state GST would be applicable to all transaction of goods and services made for a consideration except the exemption goods and services, goods which are outside the scope of GST.

3.

A two rates structure - a lower rate for necessary items and goods of basic important and a standard rate for goods of basic important and standard rate for goods in general . There will be a special rate for precious metals and list of exempted items.

4.

The GST will be levied on import of goods and services into the country.

III OBJECTIVES OF GST

1. One country,- one tax

2. Uniform registration, payment and input credit 3. Consumption based tax instead of manufacturing 4. Reduce tax evasion and corruption

5. Increase productivity

6. Increase tax to GDP Ratio and revenue surplus 7. Reducing economic distortions

8. Subsume all indirect taxes at centre and state level under

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13 | P a g e

9.

To eliminate the cascading effect of indirect taxes on single transaction

IV SCOPE OF GST

1. All goods and services are covered under GST Regime expect Alcoholic liquor for Human consumption.

2. Tobacco products levy of GST and centre may also levy Excise duty.

3. GST council yet to decide the incidence and levy of GST on following ; 4. Crude petroleum

5. High speed diesel 6. Natural gas

7. Aviation Turbine fuel

V REGULATORY FRAMEWORK OF GST

1. A new set up by government of India named as GST council.

2. The GST council consists of

The union finance minister (AS CHAIRMAN)

The union minister of state in charge of REVENUE or FINANCE

The minister in charge of finance or taxation, nominated by each state government.

3. All decision of the GST council will be made by three fourth majority of the votes.

5.1 Action plan of GST council

List number of Taxes, Cesses, and Surcharges to be subsumed under GST.

Preparation of list of goods and services subject to or exempt from GST.

Preparation of model GST laws, principles of levy, apportionment of tax benefits.

Fixation of rates.

Determination of threshold limit of turnover for application of GST 5.2 GST Global Scenario

More than 140 countries have already introduced GST .

France was the first country of introduce GST system in 1954.

 Typically it is a single rate system but tow/three rate systems are also prevalent. Canada and Brazil alone have a dual VAT.

Standard GST rate in most countries ranges b/w 15-20 %

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VI MODEL OF GST

6.1 Hurdles in implementation

Dispute b/w centre and Tax over tax sharing.

Highly sophisticated it infrastructure required.

Issue of taxing financial services and e-commerce is to be appropriately addressed and integrated.

Political imbalance.

6.2 Product Excluded from GST

Alcohol

Tobacco product

Petroleum product

Purchase tax

Zero rating for exports

VII PROPOSED GST RATE

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15 | P a g e

ITEMS

TOTAL GST (In%)

CENTRAL (In%)

STATE (In%)

Goods 20 12 08

Services 16 08 08

Essential Goods 12 06 06

VIII ADVANTAGES OF GST

1. Life gets simpler : GST will replaces 17 indirect tax levies and compliance costs will fall.

2. Revenue will boost : Input tax credit will encourage suppliers to pay taxes , States and central will have dual oversight .

3. Investment boost : For many capital goods , input tax credit is not available . Full input tax credit under GST will mean 12-14 % drop in the cost of capital goods Expected; A 6% rise in capital goods investment , 2%

overall.

4. Less developed states get a lift : The current interstate tax levy on products and services is 2% is kept within a state. Under GST national market , this can be dispersed , creating opportunities for others.

5. Manufactured goods could became cheaper by lower logistics and tax costs.

6. GDP lift : With the help of GST the GDP also enhance by less taxes and encourage of entrepreneurs.

7.

Freeing up E-commerce : State restrictions and levies have complicated Ecommerce. Some of the sellers do not ever ship to particular states. All this will end with GST.

IX POTENTIAL PITFALLS

Once the RAJYA SHABA (upper house) passes the amendment, there's a long way to go and much work to be done before the government April 1, 2017 , deadline can be met. Factors that could trip up GST;

The actual regime may not be the best possible, Too many exemptions could undermine the levy, Goods like petroleum, alcohol and tobacco may be excluded, A high tax rate would stoke inflation as service taxes will rise more steeply .

X TAXES

 IN SOCITY ONLY 1% PEOPLES ARE CORRECTLY WITH OUT FORCE THEY ARE PAYING TAXES.

 2011-12 TO 2014-15 IN MIDDLE OUR TAXES ARE INCRESED UPTO 25%.

 IN 2010-11 DIRECT TAX INCOME TO GOVT IS 4.46(LAK CRORES.)

 IN 2015 -16 IN INCREASES TO 7.42 (LAK CRORES).

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 IN 2012-13 2.87 CRORES MEMBERS SUBMITTED THERE INCOME REPORTS BUT IN THAT ONLY 1.62 MEMBERS ARE PAID TAXES REMAIN PEOPLE SHOWED THERE INCOME IS BELOW THAN TAX SLAB.

 IN THAT TAXED PAYED PEOPLE 89% 1.5 LAK BELOW THEY PAID TAX. TOTAL THEY PAID 8907 CRORES.

XI PEOPLE INCOME

THOSE INCOME IS BETWEEN 2.5 TO 3.5 IS 19.18 LAK

THOSE INCOME IS BETWEEN 5.5 TO 9.5 IS 20.5 LAK

THOSE INCOME IS BETWEEN 1 CR TO 5 CR IS 17,515

NOT TAX PAYERS IS 1,00,000.

IN INDIA

YEAR

CORPORATE TAX (IN CR0RES)

INCOME TAX (IN CR0RES)

OTHER TAXES (IN CR0RES)

TOTAL AMOUNT (IN CR0RES)

2015-16 454419 286801 1075 742295

2014-15 428925 265772 1095 695792

2013-14 394678 242888 1030 638596

2012-13 356326 201840 823 558989

2011-12 322816 170181 990 493987

2010-11 298688 146258 1049 445995

DEVELOPED COUNTRYS

NAME GDP

(IN MILLION DOLLERS) TAX SHARE IN GDP

AMERICA 1,79,46,996 26.9

JAPAN 41,23,258 28.3

GERMANY 33,55,772 40.6

BRITAIN 28,48,755 39

FRANCE 24,21,682 44.6

BRICS COUNTRYS

NAME GDP

(IN MILLION DOLLERS)

TAX SHARE IN GDP (OUT OF100%)

BRAZIL 17,74,725 34.4

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17 | P a g e

RUSSIA 13,26,015 19.5

INDIA 20,73,543 17.7

CHINA 1,08,66,444 22

SOUTH AFRICA 3,12,798 26.9

XII ACCORING TO 2015 WORLD BANK STATS Central taxes That The GST will replace

 Central Excise Duty

 Duties of Excise (medicinal and toilet preparations)

 Additional Duties of Excise (goods of special importance)

 Additional Duties of Excise (textiles and textile products)

 Additional Duties of Customs (commonly known as CVD)

 Special Additional Duty of Customs (SAD)

 Service Tax

State taxes that The GST will replace

 State VAT

 Central Sales Tax

 Purchase Tax

 Luxury Tax

 Entry Tax (all forms)

 Entertainment Tax (not levied by local bodies)

 Taxes on advertisements

 Taxes on lotteries, gambling COUNTRY

GST

%

COUNTRY

GST

%

INDIA ??? AUSTRALIA 5.00

FRANCE 19.60 SINGAPORE 7.00

GERMANY 19.00 CANADA 5.00

PAKISTAN 18.00 JAPAN 5.00

NEWZEALAND 15.00 SPAIN 25.00

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18 | P a g e Price Rises Due to GST

 Online Shopping

 Restaurant Bills

 Phone Bills

 Banking Services

 Jewellery

 Costly Branded Clothes

 Cigarettes

 Medicines

Prices Fall Due To GST

 Readymade Clothes

 Smallcars

 T.V's

 Media Services

 Basic Goods

XIII BENIFITS AFTER GST IMPLIMENTATION

1 . TRANSPORTATION SECTOR

 NOW TAX RATE IS BETWEEN 30% - 47%

 AFTER IMPLEMETING GST 20% - 22%

2. FAST MOVEING CONSUMER GOODS

 NOW TAX RATE IS BETWEEN MORE THAN 20%

 AFTER IMPLEMETING GST LESSTHAN 20 %

3. ENTERTAINMENT SECTOR

 NOW TAX RATE IS BETWEEN 22% - 24%

(SERVICE TAX, ENTERTAINMENT TAX, VAT )

 AFTER IMPLEMETING GST 18% - 20%

4. CEMENT SECTOR

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19 | P a g e

 NOW TAX RATE IS BETWEEN 27% - 32%

 AFTER IMPLEMETING GST 18% - 20%

5. MEDIA

 NOW TAX RATE IS BETWEEN 20% - 21

(SERVICE TAX 14% AND ENTERTAINMENT TAX 5% - 7 %)

 AFTER IMPLEMETING GST 18% - 20%

XIV NO BENEFITS AFTER GST IMPLEMENTATION

1. INFORMATION TECHNOLOGY

 Now Tax Rate is 14%

 After Implemeting GST 18% - 20%

2. TELECOM

 Now tax rate IS 14%

 After implementing GST 18%

3.BANKING

 Now Tax Rate IS 14%

 After Implemeting GST 18% - 20%.

(All the above valves are collected from data)

XV IMPORTANT POINTS

It Will Enhance Relationship Between Central And State Govt.

According This "Consumer Is King".

GST : Great Step By Team India.

GST : Great Step Towards Transformation.

GST : Great Step Towards Trasperency.

All Taxes Come Under Single Window System.

For Export Vat Problem Will Be Solve.

Transport And Cool Warehouses Problems Will Solves.

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20 | P a g e

Except Custom Duty All Indirect Taxes (Excise Duty , Service Tax , VAT,) Will Replaced By Gst.

In Country Good Business Environment Will Have.

For Agriculture Product The Transport And Availbility Of Product Will Help To Control Prices.

XVI EXAMPLE WITHOUT GST

STEP 1 RAWMATERIAL COST OF 100 , 10% TAX (10) NOW COST WILL BE 110 (100+10)

STEP 2 NEXT MANUFACTURE INCLUDE 20/- AS MARGIN , 10% TAX (13) NOW COST WILL BE 143 (110+20+13)

STEP 3 NEXT WHOLESALER INCLUDE 20/- AS MARGIN , 10% TAX (16.3) NOW COST WILL BE 179.30 (143+20+16.3)

STEP 4 NEXT RETAILER INCLUDE 10/- AS MARGIN, 10% TAX (18.9) NOW COST WILL BE 208.23 (179.30 +10+18.9)

STEP 5 PRICE OF THE PRODUCT 208.23

TOTAL TAX INCLUDED (10+13+169.30+18.90) =58.23

WITH GST

STEP 1 RAWMATERIAL COST OF 100 , 10% TAX (10) NOW COST WILL BE 110 (100+10)

STEP 2 NEXT MANUFACTURE INCLUDE 20/- AS MARGIN , 10% TAX ON 30 (3) NOW COST WILL BE 133 (110+20+3)

STEP 3 NEXT WHOLESALER INCLUDE 20/- AS MARGIN ,10% TAX ON 20 (2) NOW COST WILL BE 155 (133+20+2)

STEP 4 NEXT RETAILER INCLUDE 10/- AS MARGIN, 10% TAX ON 10 (1) NOW COST WILL BE 166 (155+10+1)

STEP 5 PRICE OF THE PRODUCT 166

TOTAL TAX INCLUDED (10+3+2+1)=16

XVII CONCLUSION

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21 | P a g e The GST is very necessary for reduce tax burden and to reduce price of the produce GST main aim is to follow uniform single tax rate in the country , it leads to reduce malpractices in pricing of product . Introduction of GST will indeed be an important perfection and next step towards a wide spread of indirect tax in India.

GST is new tax reform to develop the country by GST lot of central and state taxes will vanish and all over the country follow one tax rate , by this GST the tax on services will rises like Banking , Mobile services etc , but it is very useful for equal development in all over country.

REFERENCE

1. News papers

2. www.GST India .com 3. Books

4. Wikipedia

References

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