shruti goods and service tax

-Shruti Agrawal

GST

122 Amendment

Alcohol, tobacco,

petroleum products are exempted.

Will subsumes various central

and state indirect taxes.

Introduced in lok sabha

GOODS AND SERVICE TAX• The GST is basically an

indirect tax that brings most of the taxes imposed on most goods and services, on manufacture, sale and consumption of goods and services, under a single domain at the national level.

• The simplicity of the tax should lead to easier administration and enforcement.

• Free movement of goods from one state to another.

Tax structure

Indirect Tax

Inter-state

CGST(central)

SGST(state)

Intra-state

IGST(central)

Direct Tax

Income Tax

Proposed tax structure (GST)

How it works

Current Tax System:

100 130 150

208.23(150+58.23)

(Customer)

(10 + 13 + 16.30 + 18.93 = 58.23)

(Tax imposed)

How it works

GST:

100 130 150

166(160+6)

(Customer)

(10 + 3 + 2 + 1 = 16)

(Tax imposed)

Prime model of

GST

Central GST State GSTDual

(Canada)

Model of GST

GST Around the WORLD• France was the first to introduce GST.

• Only Canada has dual GST model(Just like India is going to implement Dual GST Model).

• Rate of GST ranges between 15–20% generally(may differ to higher/lower side in few countries).

• Around 160 countries have GST.

GST Rates:

Growth in GDP:

Dual GST:• Dual GST is a type of GST in which both centre

and state governments will levy GST separately.

• Dual GST is preferred in countries where there is a federal structure of the government.

• In India, due to non consensus between central and state government, the proposal is to introduce a Dual GST regime i.e. Central and State GST.

• The GST is expected to foster increased efficiencies in the economic system thereby lowering the cost of supply of goods and services.

CGST

SGST

IGST

Components

Mechanism:Case 1: Sale in one state, resale in the same state

Mechanism:Case 2: Sale in one state, resale in another state

Mechanism:Case 3: Sale outside the state, resale in that state

Advantages

Effective use of resources

Industrial growth

Less price

More revenue

Estimated increase in GDP by 0.9%-1.7%

Fewer Taxes

Increase in GDP

Disadvantage

Confusion and mistrust

Add upt0 8% on cost of house.Reduce in demand

CGST and SGST are another name of service tax value added tax etc.

Easy to say than done.

Hurdles

Extensive Training to Tax Administration Staff

Robust IT Network

Threshold Limit in GST

Revenue Neutral Rate (RNR)

Consent of States

Passing of Bill in Rajya Sabha

Conclusion:• India is a developing country and GST

is one of the biggest reforms after independence.

• After careful study and by taking specific steps to resolve the problems, GST can turn out to really helpful and turning point in Indian history.

THANK YOU..!!