Latest Expert Exchange Queries
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) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: list of goods taxed at 4% :: form 3cd :: empanelment :: VAT Audit :: cpt :: ACCOUNTING STANDARDS :: due date for vat payment
Service Tax »
 GST coming soon, but don’t expect quick benefits; rich valuation to stall stocks
 FM Arun Jaitley underlines urgency to pass GST bills in this Parliament session
 Government may table 4 GST bills in Parliament today
 Applicability Of Gst Law On Educational Institutions
 Cabinet clears 4 Bills, GST likely to roll out by July 1
 GST may also impact income tax collections: Experts
 Companies, consultants grope in the dark to meet GST deadline
 Cabinet approves GST, e-commerce cos to pay up to 1% tax
 Cabinet approves supporting GST legislations ahead of 1 July roll-out
 GST: Centralized assessment for service-oriented industries likely
 Tax department to calculate GST’s impact on inflation

India's proposed goods and services tax
January, 07th 2010

India plans a nationwide goods and services tax, which would streamline its complex and overlapping revenue system, but has delayed the targeted April 1 launch as it looks to iron-out differences with the states.

State finance ministers are scheduled to meet in mid-January to discuss details and timing.

How does it work?
he proposed GST is an indirect tax that would replace existing state and federal levies such as excise duty, service tax, and value-added tax (VAT).

GST would be administered on a dual basis at the state and federal level and would apply to almost all goods and services produced in India or imported. Exports would not be subject to GST.

Producers would receive credits for tax paid earlier, which would eliminate multiple taxation on the same good or service.

Direct taxes, such as income tax, corporate tax and capital gains tax would not be affected.

What's the rationale for the GST?
Eliminating a multiplicity of existing indirect taxes would simplify the tax structure, broaden the tax base, and create a common market across states and federally administrated districts.

Increased compliance and fewer exemptions to GST would lift India's federal tax-to-GDP ratio from 11.8 percent.

At the same time GST would lower the average tax burden for companies that now pay "cascading" taxes on top of taxes through the production process.

By lowering business costs it would boost economic growth and increase exports, proponents argue, and bring India in line with practices in many developed economies.

Reducing production costs would make exporters more competitive.

"The GST may usher in the possibility of a collective gain for industry, trade, agriculture and common consumers as well as for the central Government and the state Governments," a November report by a government panel said. "The GST may, indeed, lead to the possibility of collectively positive-sum game."

What are the GST rates?
The actual rates are undecided. India's 13th Finance Commission, a government panel that recommends sharing of taxes between the states and the federal government, recently backed a combined rate of 12 percent -- 5 percent for the central government and 7 percent for the states.

By comparison, the current rate of the various indirect taxes levied in India amounts to roughly 20 percent, and can be much higher.

Are there exemptions?
Goods deemed necessary or of basic importance would be taxed at a lower rate, while precious metals would be taxed at a separate rate.

Petroleum products such as crude oil, motor spirit and diesel would be exempted from the GST but would still be subject to sales tax and other duties now levied.

Alcoholic beverages would receive similar treatment.

When will the GST be introduced?
Unclear. Finance Minister Pranab Mukherjee said recently that the government would not meet its target of starting it with the fiscal year on April 1, 2010, as the government works towards resolving disagreements with states.

Media reports have suggested that the GST could be implemented on Oct. 1, although some observers have questioned the wisdom of rolling out the tax halfway through the fiscal year.

Will the states lose out?
In order to compensate states for potential lost revenue, a government panel has proposed to create a 500 billion rupee (USD10.8 billion) fund as incentive for states to buy into GST, according to a report in Tuesday's Mint newspaper.

What happens next?
The legislation to make constitutional amendments needs to be finalised and the mechanism for administering the tax needs to be created. The government also needs to set up the technology infrastructure to manage the tax.

What is the revenue impact?
The GST is initially intended to be revenue-neutral but is eventually expected to increase the tax take thanks to more efficient collection and increased compliance. "It will smoothen the tax process, reduce transaction costs and raise the tax-to-GDP ratio," said DK Joshi, economist at ratings agency Crisil in Mumbai.

What about the economic impact?
Implementation of a comprehensive GST would lift India's roughly USD1.15 trillion economy by between 0.9 percent and 1.7 percent, on top of whatever growth would otherise be achieved, according to a report by the New Delhi-based economic think tank the National Council of Applied Economic Research. Exports would rise by between 3.2 percent and 6.3 percent, while imports would increase 2.4 percent to 4.7 percent, the study found.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Company Search Engine Optimization Company US SEO Local SEO Company Website SEO Company Alabama SEO Company Alaska SEO Company Arizona SEO Company Arkansas SEO Company California SEO Company Colorado SEO Company Connecticut SEO Company Delawa

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