This report, published jointly by CII and Easemy GST explains Goods and Service Tax as a comprehensive, multi stage, single destination based consumption tax which will replace the other existing tax such as CENVAT, Sales Tax, Excise Duty. It has been an eye catcher not only for the market but also for the manufacturers and the consumers. It is a one indirect tax, which aims at unifying the tax structure in India.
GST is destination-based consumption tax levied at multiple stages of production and distribution of goods and services. It combines various other taxes such as state and local tax, entertainment tax, excise duty, surcharges, octroi and others. The tax is applicable on transaction value which includes packaging, commission and other expenses incurred during sales. It allows full tax credit from inputs and capital goods on procurement which can later be set off against the GST output liability.
There are four kinds of GST that would be levied namely CGST, SGST, IGST, and UTGST. The tax rates would vary from 0% to 28%. Essential item milk, curd, fruits and vegetables have been not been taxed at all whereas electronic items, clothes and some services have been kept under the slab of 18%.
A salient feature of GST would be that goods and services are considered alike and within the supply chain, they are taxed at a flat single rate till the customers can access them. The tax reform thus gives an equal footing to large enterprises and SMEs and taxes the stock transfers uniformly.
By merging a large number of Central and State taxes into a single tax, GST is significantly easing double taxation and making taxation overall easy for the industries. For the end customer, the most beneficial will be in terms of reduction in the overall tax burden on goods and services. Introduction of GST is also making Indian products competitive in the domestic and international markets. Last but not least, the GST, because of its transparent character, is being easier to administer.
This report was unveiled at the Conference on Goods and Services Tax (GST) held on 28 June 2017 in New Delhi.