What Is Goods And Service Tax (GST)?

GST will come into force from 1st April 2017 and there is buildup
of excitement and apprehension. At the appropriate time, CAP will organize a
workshop on this topic especially for NGOs offering services falling within the
purview of Service tax and NGOs who sell good and products and fall within the
scope of VAT.

What
is GST?

It is a destination based tax on
consumption of goods and services. It is proposed to be levied at all stages
right from manufacture up to final consumption with credit of taxes paid at
previous stages available as setoff. In a nutshell, only value addition will be
taxed and burden of tax is to be borne by the final consumer.

Existing
taxes proposed to be subsumed under GST?

The GST would replace the following taxes:

(i) Taxes currently levied and collected by the Centre:

a. Central Excise duty

b. Duties of Excise (Medicinal and
Toilet Preparations)

c. Additional Duties of Excise (Goods
of Special Importance)

d. Additional Duties of Excise (Textiles
and Textile Products)

e. Additional Duties of Customs
(commonly known as CVD)

f. Special Additional Duty of Customs
(SAD)

g. Service Tax

h. Central Surcharges and Cesses so far
as they relate to supply of goods and services

(ii) State taxes that would be subsumed under the
GST:

a. State VAT

b. Central Sales Tax

c. Luxury Tax

d. Entry Tax (all forms)

e. Entertainment and Amusement Tax
(except when levied by the local bodies)

f. Taxes on advertisements

g. Purchase Tax

h. Taxes on lotteries, betting and
gambling

i. State Surcharges and Cesses so far
as they relate to supply of goods and services.

The GST Council shall make
recommendations to the Union and States on the taxes, cesses and surcharges
levied by the Centre, the States and the local bodies which may be subsumed in
the GST.

Introduction of GST would be a very
significant step in the field of indirect tax reforms in India. By amalgamating
a large number of Central and State taxes into a single tax and allowing
set-off of prior-stage taxes, it would mitigate the ill effects of cascading
and pave the way for a common national market. 
“For any tax related advisory, contact us at connect@capindia.in”
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