sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Service Tax »
 12 ways to avoid paying more for bank services
 I-T return filing: Income Tax offices, Ayakar Seva Kendras to remain open from March 29-31
 Top 5 money matters you must settle before March 31 From income tax returns to LTCG,
 Steep fines for missing March 31 income tax deadline
 CBEC clears some air on refunds under GST, central excise, service tax laws
 3 key tax changes for senior citizens which will come into effect from April 1, 2018
 Income tax returns (ITR) filing: Not filed returns for 2 years? Beware! Deadline nearing
 All you want to know about HRA: When you can claim and how it is calculated?
 Income Tax Saving: 6 ways to save tax without investing before March 31 tax deadline
 Unnable to file your tax return? Take help of these portals
 Do you know which 80C instruments can help you save tax and carry no future tax liability?

More than just a tax on goods and services
December, 08th 2015

Every time there's some positive announcement on the Goods & Services Tax, the stock market rises in anticipation. ET navigates through the ABC of GST, and tries to make sense of Dalal Street's reactions and what is in store for the economy if the tax becomes a reality.

1. What is GST?

Simply put, GST is a centralised tax. Currently, companies and businesses pay lot of indirect taxes such as VAT, service tax, sales tax, entertainment tax, octroi and luxury tax. Once GST is implemented, all these taxes would cease to exist. There would be only one tax, that too at the national level, monitored by the central government. GST is also different in the way it is levied — at the final point of consumption and not at the manufacturing stage. At present, separate tax rates are applied to goods and services. Under GST, there would be only one tax rate for both goods and services. So, whether you are in Mumbai or Darbhanga, you will have to pay the same tax rate.

2. Why are the stock markets excited about GST?

The markets are betting that GST would provide the much needed push to the economy. At a micro level, sectors such as retail and manufacturing sectors such as automobiles would see an increase in their margins. The benefits of GST would be most evident on the manufacturing sector. However, what markets may be ignoring is the short term impact of GST. According to the experience of countries such as Australia and Malaysia, GST triggers inflation in the first couple of years. Also, if the government doesn't scrap dual GST (1% being levied by states), the benefits of GST would reduce significantly.

3. What are the economic benefits from a GST Rollout?

The biggest benefit of GST is that it would bring in more revenue to the government. Currently, there are a lot of slippages in taxes. With just one authority managing the tax, collections would go up. Also, since the tax would be charged on a consumption basis and not on manufacturing, poor states of the country would benefit. Under GST, irrespective of where the goods are manufactured, tax would be charged at the point of consumption, which essentially means that even poor states would see more funds being generated which could be used for their development.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Achievements

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions