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Adil Khan
- Thirst Of Success.
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Goods and service tax is means that a company or a business man will be follow only one tax system It is a replacement of other taxes like Input vat, Out put vat, Octroi Tax, Freight Tax , Sales Tax or indirect tax. The GST system is based on the same concept as VAT. Here, set-off is available in respect of taxes paid in the previous level against the GST charged at the time of sale. The GST model has some aspects which are as followsComponents GST will be divided into two components, namely, Central Goods and Service Tax and State Goods and Service Tax. Rate Rates charged across all states and the central level will be uniform along with the regulations, definitions and classifications Applicability GST will be applicable to all Goods and Services sold or provided in India, except from the list of exempted goods which fall outside its purview. Payment GST will be charged and paid separately in case of Central and State level. Input Tax credit The facility of Input Tax Credit at Central level will only be available in respect of Central Goods and Service tax. In other words, the ITC of Central Goods and Service tax shall not be allowed as a set-off against State Goods and Service tax and vice versa. Would the implementation of GST be an improvement over the current taxation system in India If yes, what would be its benefits over the current system The implication of GST assures a single taxation system in the entire country for all goods and services making tax compliance easier and more effective. The major benefits of this proposal according to Report of Task Force on Implementation of GST on the website www.goodsandservicetax.com are To The Economy - It will simplify Indias tax structure, broaden the tax base, and create a common market across states. This will lead to increased compliance and increase Indias tax-to-gross domestic product ratio. According to a report by the National Council of Applied Economic Research, GST is expected to increase economic growth by between 0.9 per cent and 1.7 per cent. Exports are expected to increase by between 3.2 per cent and 6.3 per cent, while imports will likely rise 2.4-4.7 per cent, the study found. Tax policies play an important role on the economy through their impact on both efficiency and equity. A good tax system should keep in view issues of income distribution and, at the same time, also endeavour to generate tax revenues to support government expenditure on public services and infrastructure development. Cascading tax revenues have differential impacts on firms in the economy with relatively high burden on those not getting full offsets. This results in loss of income and welfare of the affected economy. The ongoing tax reforms on moving to a goods and services tax would impact the national economy, International trade, firms and the consumers There has been a good deal of criticism as well as appraisal of the proposed Goods and Services Tax regime. It is considered to be a major improvement over the pre-existing central excise duty at the national level and the sales tax system at the state level, the new tax will be a further significant breakthrough and the next logical step towards a comprehensive indirect tax reform in the country. GST is not simply VAT plus service tax, but a major improvement over the previous system of VAT and disjointed services tax a justified step forward. India is a federal republic, and the GST will thus be implemented concurrently by the central and state governments as the Central GST and the State GST respectively and it appears that there will be different rates of taxes. However a single rate would help maintain simplicity and transparency by treating all goods Thanks
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