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GST TO ELIMINATE MULTIPLE TAXES

Goods and Services Tax - GST - By: - Dr. Sanjiv Agarwal - Dated:- 13-8-2016 Last Replied Date:- 18-8-2016 - After 25 years India started walking on the road to economic reforms and as India marches towards introduction of GST in 2016-17 in 70th year of its independence, we may liberalize ourselves from the clutches of multiplicity of taxes levied by both, centre as well as states. However, the GST which is proposed in the current form is a combination of three types of taxes- Central GST, State .....

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16 by Rajya Sabha (upper house) and on 8th August, 2016 by lok sabha (lower house). What a gift to Indian citizens and businessmen in 70th year of Independence. Goods and Services Tax (GST) GST is one indirect tax for the whole nation, which will make India one unified common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which make .....

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6) Service Tax (1994) and a host of state levied taxes including Value Added Tax (VAT). GST aims at subsuming many multiple taxes presently levied by Central and State Governments with the objective to follow one nation - one market - one tax policy and scrap the cascading effect of taxes on cost i.e. payment of tax on taxes. GST would therefore, bring in economies of scale, operational efficiency, lower cost of production and benefits accruing to consumers. GST is expected to change the way bus .....

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amounts apportioned to / collected by / used for payment by States shall not from part of consolidated fund of India Taxes collected by Union shall be distributed between Union and States The additional tax proposed for manufacturing states shall not be levied GST Council to establish a mechanism for adjudicating any dispute arising out of Council's recommendations - Government of India and State(s) Government of India and State(s) on one side and one or more States on other side Two or mor .....

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ainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States), Octroi and Entry tax, Purchase Tax, Luxury tax, and Taxes on lottery, betting and gambling. However, it will have to be ensured by the GST Council that states should not levy new taxes in future (unless there is a emergency) to complicate the taxes again over a period. We should not have a sequel of GST like GST-2 after a decade or so. This is important as centre has .....

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be available to the taxpayers online, which would make compliance easy and transparent. Uniformity of tax rates and structures: GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business. In other words, GST would make doing business in the country tax neutral, irrespective of the choice of place of doing business. Removal of cascading: A system of seamless tax-credits throughout the value-chain, and across bound .....

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locally manufactured goods and services. This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports. The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost. For Central and State Governments Simple and easy to administer: Multiple indirect taxes at the Central and State levels are being replaced by GST. Backed with a robust end-to-end IT system, GST would be simpl .....

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ues of the Government, and will therefore, lead to higher revenue efficiency. For the Consumers Single and transparent tax proportionate to the value of goods and services: Due to multiple indirect taxes being levied by the Centre and State, with incomplete or no input tax credits available at progressive stages of value addition, the cost of most goods and services in the country today are laden with many hidden taxes. Under GST, there would be only one tax from the manufacturer to the consumer .....

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levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State. Input Tax Credit The input tax credit of CGST would be available for discharging the CGST liability on the output at each stage. Similarly, the credit of SGST paid on inputs would be allowed for paying the SGST on output. No cross utilization of credit between CGST and SGST would be permitted. However, IGST can be set off against IG .....

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