Goods and Services Tax One Country One Tax One Market
GST is one indirect tax for the whole nation, which will make India one unified common market. GST 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.
Existing dealers: No fresh registration needed for existing dealers. Existing VAT/Service tax/Central Excise dealer data to be migrated to GST system.
New dealers: Single application to be filed online for registration under Goods & Services Tax (GST).
The registration number will be PAN based and will serve the purpose for Centre and State.
- Each dealer to be given unique id GSTIN
- Registration to be granted within 3 days.
- Post registration verification in risk based cases only.
Centre and State level taxes are being subsumed into GST
At the Central level, the following taxes are being subsumed:
At the State level, the following taxes are being subsumed:
- Central Excise Duty
- Additional Excise Duty
- Service Tax
- Additional Customs Duty commonly known as Countervailing Duty
- Special Additional Duty of Customs.
- 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,Taxes on lottery, betting and gambling.
RETURNS Common return
would serve the purpose of both Centre and State Government.
Most average tax payers would be using only four forms for filing their returns. These are return for supplies, return for purchases, monthly returns and annual return. Small taxpayers:
Small taxpayers who have opted composition scheme shall have to file return on quarterly basis.
Filing of returns shall be completely online. There would no manual filing of returns
All taxes can also be paid online.
All mis-matched returns would be auto generated, and there would be no need for manual interventions.
Most returns would be self-assessed.
Benefits of GST
For Central and State Governments
- For business and industry
- Easy compliance
- Uniformity of tax rates and structures
- Gain to manufacturers and exporters
- The subsuming of major central and State taxes in GST complete and comprehensive set-off of input goods and services
- Phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services.
- This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports.
- The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost.
For the consumer
- Simple and easy to administer: Multiple indirect taxes at the Central and State levels are being replaced by GST.
- GST would be simpler and easier to administer than all other indirect taxes of the Centre and State levied so far.
- Better controls on leakage: GST will result in better tax compliance due to a robust IT infrastructure.
GST council sets exemption threshold for tax at Rs.20 lakh
- Single and transparent tax proportionate to the value of goods and services.
- Due to multiple indirect taxes being levied by the Centre and State, with incomplete or no input tax credits available at progressive stages of value addition, the cost of most goods and services in the country today are laden with many hidden taxes.
- Under GST, there would be only one tax from the manufacturer to the consumer, leading to transparency of taxes paid to the final consumer.
- Relief in overall tax burden: Because of efficiency gains and prevention of leakages, the overall tax burden on most commodities will come down, which will benefit consumers.