GST India- Goods & Service Tax/Impact of GST/Register in Goods & Service Tax Identification Number/Positive & Negative Aspects

  1. ATiwari

    ATiwari ClueMatrix India

    GST India- Goods & Service Tax (Impact of GST/Register in GSTIN/Positive & Negative Aspects)
    GST- Goods and Service Tax (वस्तु एवं सेवा कर) is a consumption based tax levied on sale, manufacture, and consumption of Goods & Services at a national level. It has been discussed for a long time, now will be implemented on 25th June 2017 across the nation in this financial year budget. This tax will be a substitute for all indirect tax (अप्रत्यक्ष कर) levied by State & Central Government. Exports and direct tax such as corporate tax, capital gain tax, and income tax will not be affected by GST. As GST tax would apply to all goods other than crude petroleum, diesel, aviation turbine fuel, natural gas, and motor spirit. It would apply to all services barring a few to be specified. With the increase of international trade in services, GST has become a global standard (वैश्विक मानक). The proposed tax system will take the form of “Dual GST” which is concurrently levied by central and state government. This will comprise of:
    • CGST- Central Goods and Service Tax (केंद्रीय वस्तु एवं सेवा कर) which will be levied by Centre
    • SGST- State Goods and Service Tax (राज्य वस्तु एवं सेवा कर) which will be levied by State
    • IGST- Integrated Goods and Service Tax (एकीकृत वस्तु एवं सेवा कर), which will be levied by Central Government on the interstate supply of goods and services.
    There are many taxes has been subsumed under GST which are as under:
    • Central Indirect Taxes & Levies (केंद्रीय अप्रत्यक्ष कर और वसूल करना)- Central Excise Duty, Excise Duty levied under the Medicinal Preparations, Additional Excise Duties, Additional Customs Duty, Special Additional Duty of Customs, Central Surcharge & Cess, Service Tax etc.
    • State Indirect Taxes & Levies (राज्य अप्रत्यक्ष कर और वसूल करना)- VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Luxury Tax, Octroi & Entry Tax, Purchase Tax, State Cesses & Surcharges, Betting & Gambling, Taxes on Lottery etc.
    What Impact of GST Will Have on Pricing of Products?
    We had been giving different types of tax to the Govt while taking or purchasing any product or service till now, such as Sales Tax, VAT, Service Tax etc. But from the 1st of July 2017 when GST will be implemented (कार्यान्वित) in across the country. It's estimated rate can be 18%, e.g. If a mobile is made in Hyderabad and I want to but it in Ghaziabad then it will be charge only 1 tax instead of 3 states tax. However, this will increase inflation (महंगाई में वृद्धि) in a way, GST will not only benefit but also have a dark side.
    • For Example- Currently, we pay 14.5% tax on service. As on the mobile bill of Rs. 1000/- we pay Rs. 145/- service tax. After GST, it will be 18% i.e. we have to pay Rs. 180/- instead of Rs. 145/-. In this way, many services will be expensive such as Food in the Restaurant, Air Tickets, Insurance Premium (रेस्तरां में भोजन, एयर टिकट, बीमा प्रीमियम) etc.
    How Will Taxes be Increased?
    In the case of Intra-State Transactions (अंतर-राज्यीय लेनदेन), Seller collects both CGST and SGST from the buyer and CGST needs to be deposited with Central Government and SGST with State Government. IGST- Integrated Goods and Service (एकीकृत वस्तु एवं सेवा कर) Tax shall be levied on Inter-State Transactions of goods and services which are based on destination principle. Tax gets transferred to Importing state. Moreover, it is proposed to levy an additional tax on supply of goods, not exceeding one percent (1%), in the course of inter-state trade or commerce (अंतर-राज्यीय व्यापार या वाणिज्य), to be collected by the Central Government. For a period of 2 years and assign to the states where the supply originates. Valuation of stock transfers (स्टॉक स्थानान्तरण का मूल्यांकन) to be determined. Exports and Supplies to SEZ units will be zero rated.

    How to Enrol & Register in Goods & Service Tax Identification Number (GSTIN)?
    The NSDL- National Securities Depository Ltd (राष्ट्रीय प्रतिभूति भंडार लिमिटेड) has been appointed to incubate the GST Portal and develop its functionality. NSDL has created a pilot portal known as “Goods & Service Tax Pilot Portal”. The link is mentioned below.
    Here, every taxpayer will be issued a 15 digit Common Identification Number (सामान्य पहचान संख्या) which will be called as “GST Identification Number” (GSTIN) a PAN based Number. Online Application Form for dealers will be available to provide their details and upload documents. Registration includes basic steps like register themselves on the Enrolment page and then Login using the given “User Id & Password”, filling the application form by uploading the requisite documents (अपेक्षित दस्तावेज) related to Excise, Service Tax, IEC, CIN, Professional Tax number, Shops & Establishment Number and any other state-specific registration numbers (विशिष्ट पंजीकरण संख्या), contact numbers, postal address & email address of business entity, bank account details including MICR & IFSC code, place of business, details of goods & services, scanned signed photographs.

    Positive and Negative Aspects of GST Bill (जीएसटी विधेयक के सकारात्मक और नकारात्मक पहलू)
    Like, every coin has 2 sides, even this concept of Goods & Service Tax has its own positives and negatives (सकारात्मक और नकारात्मक), the impact of GST is as follows:

    Positive Aspects of Goods & Service Tax (GST)-
    1. The main reason to implement GST is to abolish the cascading effect (प्रपातन प्रभाव) on tax. A product on which excise duty is paid can also be liable for VAT. Suppose a product “A” is manufactured in a factory. As soon as it releases from the factory, excise duty has to be paid to Central Govt. When the product “A” is sold in the same state then Value Added Tax (VAT) has to be paid to State Govt. Also, no credit on excise duty (उत्पाद शुल्क) paid can be taken against output VAT. This is termed as cascading effect since the double tax is levied on the same product.
    2. GST- Goods & Service Tax will lead a more transparent and neutral manner (पारदर्शी और तटस्थ तरीके) to raise revenue.
    3. Price reduction (कीमत में कमी) as the credit of input tax is available against output tax.
    4. The GST is being introduced to create a common market across states, not only to avoid enfeebled effect of indirect tax (अप्रत्यक्ष कर का असफल प्रभाव) but also to improve tax compliance.
    5. Simplified and cost saving system as procedural cost reduces due to uniform accounting for all types of taxes. Only 3 accounts; CGST, SGST, IGST have to be maintained.
    6. GST is beneficial for both economy and corporations (अर्थव्यवस्था और निगम). The reduced tax burden on companies will reduce production cost making exporters more competitive.
    Negative Aspects of Goods & Service Tax (GST)-
    1. GST is being referred as a single taxation system (एकल कराधान प्रणाली) but in reality, it is a dual tax in which state and centre both collects separate tax on a single transaction of sale and service.
    2. At present, the main Indirect tax system of Central Government is central excise. All the goods and commodities are not covered by the central excise and further, there is an exemption limit (छूट सीमा) of Rs. 1.5 crores in the central excise and further traders are not liable to pay Central Excise. The central excise is payable up to the stage of manufacturing but now Goods & Service Tax (GST) is payable up to the stage of the sale.
    3. The calculation of RNR- Revenue Neutral Rate (राजस्व तटस्थ दर) is very difficult and the further government wants to enhance its revenue hence the rate of Tax will be a problem. As per the New reports, the news reports the proposed rate for State GST is 12% and Central GST is 14% plus government to impose 1% Central Sales Tax (CST) at the initial stage of GST on the interstate sale of Goods and Services. So the normal rate of overall tax will be 26%. This rate is very high comparing to the fact that small and medium Industries are at present not covered by the central excise and most of the Goods such as agricultural products (कृषि उत्पाद) are out of the preview of the Central Excise.
    4. The majority of dealers are not covered with the central excise but are only paying VAT in the state. Now all the Vat dealers will be required to pay Central Goods & Service Tax (केंद्रीय सामान और सेवा कर).
    5. Improvement in the manufacturing and distribution of Goods & Service, increase in experts, various reforms, check on corruption, less government control (विशेषज्ञों, विभिन्न सुधारों, भ्रष्टाचार की जांच, कम सरकारी नियंत्रण) are some of the factors which are responsible for the economic growth of the country. A tax system can make a revolution in the economy of the country is a rare thing.
    Note: - Most indirect taxes will now start coming under GST. Goods & Service Tax (वस्तु एवं सेवा कर) has already been implemented in 165 countries with different names, even in Pakistan. When GST is implemented, one country is affected positively and negatively (सकारात्मक और नकारात्मक) in both ways. Neglecting the negative side will not be right, we should know to all aspects of GST.

    Users, here we provided to you all information related GST India- Goods & Service Tax, Impact of GST, Positive & Negative Aspects (माल और सेवा कर, जीएसटी का प्रभाव, सकारात्मक और नकारात्मक पहलू). If you have any query regarding this article then feel free to comment below or leave it at “Post Your Questions” section. Thanks for visiting Indians Reader Portal (India’s Largest Online Discussion Forum). For more details about GST- India, kindly visit the official web Portal of Central Board of Excise and Customs, Department of Revenue (Ministry of Finance) Govt of India through the given below link.
    Jittu likes this.
  2. Jittu

    Jittu New Member

    Nice introduced Goods and Service Tax, this is basic knowledge for every Indian person.
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