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GST and Its Impact On Various Sector: September 2017
GST and Its Impact On Various Sector: September 2017
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Ramya N.
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Ms.N.Ramya
Assistant Professor,
Department of Commerce with Professional Accounting,
Dr.N.G.P. Arts and Science College, Coimbatore.
Ms.D.Sivasakthi
Assistant Professor,
Department of Commerce with Professional Accounting,
Dr.N.G.P. Arts and Science College, Coimbatore.
ABSTRACT: Goods and Service Tax is a comprehensive tax levy on manufacture, sale and
consumption of goods and services. GST is termed as biggest tax reform In Indian Tax
Structure. It will not be an additional tax, it will include central excise duty, service tax
additional duties of customers at the central level, VAT, central sales tax, entertainment tax,
octroi, state surcharge, luxury tax, lottery tax and other surcharge on supply of goods and
services. The purpose of GST is to replace all these taxes with single comprehensive tax,
bringing it all under single umbrella. The purpose is to eliminate tax on tax. This paper will
throw light on GST its features and also impact of GST on various sectors.
INTRODUCTION OF GST
Introduction of the Value Added Tax (VAT) at the Central and the State level has
been considered to be a major step – an important step forward –in the globe of indirect tax
reforms in India. If the VAT is a major improvement over the pre-existing Central excise
duty at the national level and the sales tax system at the State level, then the Goods and
Services Tax (GST) will indeed be an additional important perfection – the next logical step –
towards a widespread indirect tax reforms in the country. Initially, it was conceptualized that
there would be a national level goods and services tax, however, with the release of First
Discussion Paper by the Empowered Committee of the State Finance Ministers on
10.11.2009, it has been made clear that there would be a “Dual GST” in India, taxation power
– both by the Centre and the State to levy the taxes on the Goods and Services. Almost 150
countries have introduced GST in some form. While countries such as Singapore and New
Zealand tax virtually everything at a single rate, Indonesia has five positive rates, a zero rate
and over 30 categories of exemptions. In China, GST applies only to goods and the provision
66 Journal of Management and Science ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue. No.1 | Sep’17
of repairs, replacement and processing services. GST rates of some countries are given
below.
Country Rate of GST
Australia 10%
France 19.6%
Canada 5%
Germany 19%
Japan 5%
Singapore 7%
Sweden 25%
New Zealand 15%
World over in almost 150 countries there is GST or VAT, which means tax on goods
and services. Under the GST scheme, no distinction is made between goods and services for
levying of tax. In other words, goods and services attract the same rate of tax. GST is a multi-
tier tax where ultimate burden of tax fall on the consumer of goods/ services. It is called as
value added tax because at every stage, tax is being paid on the value addition. Under the
GST scheme, a person who was liable to pay tax on his output, whether for provision of
service or sale of goods, is entitled to get input tax credit (ITC) on the tax paid on its inputs.
Features of GST
GST will subsume central indirect taxes like excise duty, services tax etc and also
state levies like VAT, Octroi, entry tax, luxury tax etc.
It will have two components, central GST levied by Centre and State GST levied by
the States.
Only Centre may levy and collect GST on supplies in case of inter-state trade and
collection of tax will be divided between centre and state.
A two-rate structure will be adopted. It means lower rate for necessary items and
goods of basic importance and a standard rate for goods in general. There will also be
a special rate for precious metals and a list of exempted items.
Over-lapping of tax, tax on tax will be eliminated with GST.
Both Goods and Services are taxed in same manner in chain of supply till they are
reached to consumer. They are not distinguished under GST.
67 Journal of Management and Science ISSN: 2249-1260 | e-ISSN: 2250-1819 | Special Issue. No.1 | Sep’17
Benefits of GST
GST provide comprehensive and wider coverage of input credit setoff, you can use
service tax credit for the payment of tax on sale of goods etc.
CST will be removed and need not pay. At present there is no input tax credit
available for CST.
Many indirect taxes in state and central level included by GST, You need to pay a
single GST instead of all.
Uniformity of tax rates across the states
Ensure better compliance due to aggregate tax rate reduces.
By reducing the tax burden the competitiveness of Indian products in international
market is expected to increase and there by development of the nation.
Prices of goods are expected to reduce in the long run as the benefits of less tax
burden would be passed on to the consumer.
Govt. departments and service sector shall have to bear impact of GST. All sections of
economy viz., big, medium, small scale units, intermediaries, importers, exporters, traders,
professionals and consumers shall be directly affected by GST... One of the biggest taxation
reforms in India – the Goods and Service Tax (GST) -- is all set to integrate State economies
and boost overall growth. GST will create a single, unified Indian market to make the
economy stronger. Experts say that GST is likely to improve tax collections and Boost
India’s economic development by breaking tax barriers between States and integrating India
through a uniform tax rate. Under GST, the taxation burden will be divided equitably
between manufacturing and services, through a lower tax rate by increasing the tax base and
minimizing exemptions.
References:-
1) Http://goodsandservicetax.com/gst/showthread.php?69-CHAPTER-X-Goods-and-
Services-Tax-Theway-forward
2) Http://en.wikipedia.org/wiki/Goods_and_Services_Tax_(India)
3) Http://www.taxmanagementindia.com/visitor/detail_rss_feed.asp?ID=1226
4) Http://www.gstindia.com/
5) Http://www.thehindubusinessline.com/todayspaper/tp-others/tp-
taxation/article2286103.ece
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