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: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: empanelment :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4% :: VAT RATES :: ACCOUNTING STANDARD :: form 3cd :: cpt :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment
 
 
« General »
 Shah gets notices over civic tax dues
 Tax revenue down in first six months after prohibition
 Post demonetisation, Income Tax department sends 30 cases of irregularities to Enforcement Directorate, CBI
 Don’t rush into a new tax without being prepared
 Can’t tax income from palace rent: Supreme Court
  Withdrawal of Legal Tender Character of the existing Bank Notes in the denominations of â‚ą 500/- and â‚ą 1000/- (Updated as on November 30, 2016)
 Cases for tax scrutiny will be selected by machines
 Time to revisit 1997 direct tax rates, says P Chidambaram
 Lok Sabha passes Bill to tax black money deposits post demonetisation
 Last day to pay property tax with old notes
 Income tax department asks IDS declarants to pay tax by 30 November

Non-GST to pay higher taxes
July, 15th 2009

Companies located in states that do not implement the proposed Goods and Services Tax (GST) from April 1, 2010, would not be able to claim input tax credit, said a senior finance ministry official.

Thus, firms in non-GST states would have to pay higher taxes, which will make them uncompetitive with those in states where the tax is implemented.

This is an incentive system for states to join the proposed GST, said the same official, who declined to be named.

The concept of input tax credit is essential to ensure that producers pay tax only on their value addition part, and not pay tax on tax. For example, if a company A buys inputs for Rs 1,000, which includes a tax component of Rs 100, then assuming that this company sells a product after adding value to the inputs at Rs 2,000, with a tax liability of Rs 200, the input tax credit will ensure that the net tax payable by the firm is only Rs 100 (that is Rs 200 less Rs 100).

If the company A is located in a non-GST state, it would pay a total tax of Rs 300 (Rs 200 on finished product and Rs 100 on input), compared to Rs 200 paid by other producers in a GST state.

The Centre is hoping that in such a scenario companies in GST states would lobby for introduction of the pan-India tax, which will subsume most state and Centre-level taxes.

Finance Minister Pranab Mukherjee, in an address to industry representatives last week, said that some states might decide to stay out of GST in the beginning like in the case when the Value Added Tax (VAT) was implemented four years back.

A few states like Tamil Nadu, Madhya Pradesh and Chhattisgarh have opposed or expressed reservation on implementing this pan-India consumption-based tax as many of their concerns were not resolved.

When the VAT was introduced in 2005, some states like Tamil Nadu did not join initially. But later, all the states introduced the VAT. The finance minister hinted this route could be one way to resolve the current deadlock on rolling out the GST.

If the input tax credit is not permitted, states that are implementing the GST will get extra tax revenue on sales made to buyers in non-GST states, the official said. This is because buyers in non-GST states wont be able to claim credit on taxes already paid.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Customer relationship management software CRM software Operational CRM Collaborative CRM

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