With the emergence of industrialization, GST (Goods and Service Tax) revised a big step in certifying the economic development of our country. The GST comes along with the allegiance of the development of financial services and key benefits to everyone.
Goods and Services Tax Bill (GST) known to be as 122nd Amendment Bill, was levied in April 2017.
What is GST? Why GST is needed?
GST stands for Goods & Service Tax. GST is a station based consumption tax levied at multiple stages in the distribution & production of goods.
Thus, GST will be a single comprehensive integrated tax on pure value addition at each stage.
GST will encompass all these indirect taxes and will thus facilitate the flawless flow of credit resolving the problem of double taxation and cascading effect of taxes. This will check the price of goods along with making compliances easy and bringing stability in the government’s tax revenues.
Salient features of GST:
- The Central GST and State GST are to be indemnified to the accounts of State and Centre governments separately.
- GST in India is dual model-based, central and state governments will both levy GST termed as CGST and SGST respectively. Nevertheless, the changeability and definition of taxable events and taxable individuals is the estimate of tax including valuation provisions and the basis of classifications would be uniform in both CGST and SGST.
- India is a federal country where both the Center and the State governments have been allotted the powers to levy and accumulate taxes through appropriate legislation. Both the levels of government have different authorities to perform in accordance with the division of powers prescribed in the Constitution for which they need to raise resources. Henceforth, a dual GST will be kept with the Constitutional requirement of fiscal federalism.
Will the new GST allow tax cascading benefits?
Most of us will be familiar with the fact that service tax and VAT have some key benefits, which means you can avail credit of tax paid by you on inputs. Let’s say, in case of service tax you pay tax on services you sell and while depositing this tax, you can take credit of service tax paid by you on services used as inputs. You will be glad to know that you’ll be able to enjoy these cascading benefits on GST.
In the case of inter-state sale of goods and services, the tax will be collected by the central government and after the collection 50% of the tax collected will be delegated to the state government whose buyer has purchased goods and services as GST is station based consumption tax.
If you find yourself in arduous situations and unable to file your tax under GST, you can get in touch with Future Revolution to avail of best-in-class taxation services. You can also enroll in Future Revolution company registration online.
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