Goods and Services Tax

S. G. Kulkarni , 8th Aug 09

 Q&A
Q1 : If a fine is a penalty for doing something
Wrong, then what is Tax ?
Ans. : Tax is a penalty for doing something Right.

Q2 : Why India is a land of equal opportunity for

all ?
Ans. : Because every one here has an equal
opportunity to pay tax !

Q3 : How Dharmaraj (of Mahabharat) managed

not telling a lie all his life ?
Ans. : He never had to file a Tax Return !

Q4 : Why Tax deducted at source (TDS) is a fraction

of actual tax ?
Ans. : Because the Govt. does not want you
to become mad all at once !
 Contents
Background

International scenario

Proposed GST scheme

Benefits, Issues and Challenges

 Background
GST : Single Tax to replace all
Indirect Taxes on Goods and
Services.

Present System :
Central Govt. State Govt.
Local Bodies
Excise VAT Octroi
Service Tax Cess
 Taxes to be replaced by
GST
Central excise
Additional duties of customs (CVD
and SAD)
Service tax
VAT
Central Sales tax
Entertainment tax
Luxury tax
Electricity duty
 International Scenario
More than 140 countries have already introduced
GST/National VAT, Most countries have a single
GST rate

EU
- UK 17.5%
- Germany 19%
- France 19.6%
- Belgium 21%

Australia 10%

New Zealand 12.5%

China 17%

India - (proposal ) : 16 %
(8 % CGST + 8 % SGST)
 Benefits of proposed GST
Model
Asimple common tax structure for both
goods and services

Uniform tax across the supply chain

Reduced transaction cost for tax payers

Increasedtax collections due to wider tax

base and better compliance

Improved cost competitiveness of Indian

goods and services globally
 Issues and Challenges
By far, the most important tax reform
since independence

Getting all the States to agree to

abolish multiple local taxes

Ideally GST model should be firmed up

at least 12 months prior to
implementation

Apr 2010 deadline difficult to

implement
 George Harrison :
I wrote the song Taxman when I
realized that even though we had started
earning money, we were giving away most
of it in taxes.

From the song Taxman,

the Taxman says :
If you drive a car, I will tax the street,

If you try to sit, I will tax your seat !

If you get too cold, I will tax the heat,

If you take a walk, I will tax your feet !

Thank You !