Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
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
 
 
 
 
Popular Search: empanelment :: VAT RATES :: cpt :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: due date for vat payment
 
 
Service Tax »
 Simple tax made complex
 Govt may review monthly GST return filing process
 Central Goods and Services Tax (Eleventh Amendment) Rules, 2017
 Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017
 Composition Scheme - the Central Goods and Services Tax (Removal of Difficulties) Order, 2017
 Govt asks taxpayers to file GST return for July by Tuesday
 FAQ On Government Services Under GST
 Income Tax Appellate Tribunal, Visakhapatnam Bench List Of Division Bench Cases Posted Before During The Period From 03rd Octombar To 13th October , 2017.
 Facility of LUT extended to all exporters / registered persons subject to conditions
 GST implementation – Hasty turns out nasty
 What is Goods and Services Tax Network (GSTN)?

GST and its impact on Borrowing
August, 17th 2016

As per the new tax structure, tax will be levied on the various fees that the end consumer pays to the financial institutions. So various charges like the processing fee, legal fee etc on a loan will now be taxed as per the new tax rate.

For quite some time now the political and the economical world in India has been discussing the Goods and Services Tax (GST) rather heatedly. While the political players continue to do their work and may be divided over its advantages and disadvantages we can do our bit by understanding what the GST is all about and what impact it will have on our lives especially borrowings.

Understanding Goods and Services Tax

In India there are two categories of taxes; direct taxes and the indirect taxes. Direct tax like the income tax is the payment that you pay directly to the government based on the laid out rules and the rate structure. Indirect taxes are those which you pay indirectly as you pay to another person or organization that in turn pays it to the government. There are numerous indirect taxes in India which makes the tax structure complex; indirect taxes includes tax, excise duties, luxury tax, value added tax, service tax and many more. With GST the process of indirect taxation is likely to get streamlined which means that all various kinds of taxes will now come under a single umbrella. So no more paying multiple taxes; there will be a single tax that will constitute various erstwhile taxes. This tax will be levied on goods and services both. Thus the consumer pays a single tax at the last point in the supply chain and the benefit is passed on to those at the earlier stages.

How will GST impact borrowing?

Since the bill is yet to passed so what the final draft will say is yet not sure. However expectedly this important tax reform is will impacts all industries and the common man too! For the industry it is expected to ease the cost of doing business and also make it easier to comply with the taxation process since now there will be lesser departments to deal with.

For the end user it is expected that most everyday goods could become cheaper, while certain luxury items could become costlier. The final picture however will depend on the exact rate that is implemented for various sectors. Services are generally expected to become costlier and since banking and loans is mostly about services you can expect some changes there too.

As per the new tax structure, tax will be levied on the various fees that the end consumer pays to the financial institutions. So various charges like the processing fee, legal fee etc on a loan will now be taxed as per the new tax rate. The new tax rate is likely to be 20%, currently it is 14.5% so for the borrower can expect some increase in the cost of borrowing. Banking charges and insurance premiums will also come under this purview so these services are also likely to get marginally expensive.

Apart from loans, credit card borrowing is also likely to become expensive. Sometimes when a credit card is swiped it may attract the levy of service tax on the total transaction value. Thus swiping the card only on occasions where no processing/service fee is applicable makes sense. Any interest that is charged by the credit card company due to delay or default in payment will also attract additional tax thus making the overall credit card usage costlier.

As discussed earlier these are some expected changes after implementation of the new Goods and Service tax, exact impact can be gauged only after the bill is passed and implemented.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Vision

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