With Goods and Services Tax (GST) being slated for a July 1 rollout is expected to bring a box full of surprises to the common man. Yes, this indirect tax regime touted as the biggest tax reform since independence in 1947. Moreover, the main endeavor of the Council is to introduce this tax regime in the country so that it will replace all major levies such as excise, service tax and VAT(Value Added Tax). However, in order to make things smooth, it would not be wrong to say that Central Board of Excise and Customs (CBES), which is a part of Department of Revenue under Finance Ministry has released a list of GST Tax list Rates. Yes, the list titled-GST for Common Man on everyday items used by the common man has been released for all.
Well, if we talk more about the list, the items such as unbranded atta/maida/besan, unpacked food grains, milk, egg, curd, lassi, fresh vegetables and contraceptives are such items which will remain exempted from this new regime. One thing that needs to be mentioned here is the fact that 81% items will fall in/below 18% slab. ANd, about a fifth of goods, i.e. 19% will attract the slab of above 18%. This integrated indirect tax will consolidate all indirect taxes into a single comprehensive tax, which will further help in making a uniform market.
Talking about the present indirect taxes such as:
- Excise Duty
- Entertainment Tax
- Luxury Tax
- Service Tax
- State VAT
And all other types of Central and State indirect taxes will be replaced by a single indirect tax.
Let’s just dig more into the topic and try to understand the depth of it, how it is going to impact our economy? How the implementation will take place? To know the answers of these questions, just read this article further…
GST Implementation in India & Its Impact
As we have already mentioned earlier that this indirect tax regime is proposed to be implemented with effect from July 1, 2017, thus it would not be wrong to say that it is definitely going to be one of the biggest reforms in India in the field of taxation. Moreover, experts have a firm believe that with the implementation of GST, the GDP of the country will observe a boost of 1.5%-2%. Goods and Services with subsume more than 10 existing indirect taxes so as to convert India into a common market along with ensuring the ease of doing business.
How GST Works-Salient Features
To Maintain Federal Structure
- Central and State GST on all Intra State Supplies
- On All Inter State Supplies
Input Tax Credit-Set Off
- CGST Can be Set Off Against CGST and IGST
- SGST Can be Set Off Against SGST and IGST
- IGST Can be Set Off Against IGST and CGST
GST Rate and Composition
- The four-tier structure will be lower on essential daily use items, but will be higher on luxury items and services.
- There will be an optional composition scheme for small businesses having turnover of upto Rs.50 Lakh.
Supply of Goods/Services
All forms of supply such as transfer, barter, sale, rental, lease, license, disposal or exchange, etc.
Inclusive Definition in Four Parts:
- Import Transactions
- Transactions Without Consideration
- Deemed Supply
- Transactions in the Course of Business for Consideration
Exemption Limit & Registration
- If annual turnover is upto Rs.20 Lakh (Rs.10 Lakh in North East States), no GST
- If turnover exceeds Rs.19 Lakh(Rs.9 Lakh in North East States), GST registration is required.
- 3 Monthly Returns and 1 Annual Return for Regular Taxpayer:
GSTR 1: Outward Supplies
GSTR 2: Inward Supplies
GSTR 3: Consolidated Return
GSTR 9: Annual Return
- Other return formats for different types of taxpayers
Unpacked food grains, gur, milk, eggs, curd, lassi, unpacked paneer, unbranded natural honey fresh, vegetables, unbranded atta, unbranded maida, unbranded besan, prasad, common salt, contraceptives, raw jute, raw silk, etc.
Healthcare and Education
In a nutshell, now that you are aware with GST Rates being implemented very soon, there is no denying the fact that you should keep your eyes and ears open to see how the implementation will impact the economy and you!