It is believed that GST is going to become one of the biggest landmarks in Indian tax system. GST is proposed by the government to remove all the irregularities and complication from all previous tax system. Lok Sabha passed all four GST related bills on 29th March 2017 and set the deadline of final implementation of this special bill from 1st July 2017. After implementation of GST, price of some products is going to be all time low and other may become much expensive. As per new tax policy, there will be four categories i.e. 5%, 12%, 18% and 28%, reason behind this is to impose less tax on daily needs products and maximum tax on luxury products.
Apart from all these cares and efforts there is a lot of confusion and illusion among people and it seems that it will take extra effort to implement this bill. People must know that there are two provision under this law, one is imposed by central government is known as central GST and other that state government imposed is known as state GST. Tax rates will be decided on the basis of revenue generation. Apart from some exempted products, SGST and CGST will be imposed on other remaining products. Both central and state governments are going to share equal amount of revenue generated through tax.
IGST policy is proposed by the government to collect tax in case of cross border transportation. IGST will replace central sales tax, VAT and excise duty imposed by central government. As per new rule you have to pay 12,000 as IGST when product coast is around 1 Lakhs and in current tax system you have to pay 14,500 for same product.
People will see following changes in tax system after implementation of GST.
|#||Product Name||Value and Tax amount under GST (in INR)||Value and Tax amount based on current rates (in INR)|
|2||12% Excise Duty||13,200||NA|
|3||10% profit margin||10,000||10,000|
In current law, there have been major transformation and will be imposed by the government on various products and services.
1. Tax amount will be decreased for wholesaler and retailers.
2. In place of various level of excise duty there will be single tax.
3. Small taxes increases the tax amount on retailers, wholesalers and manufacturer, this tax is going to replace all complicated taxes including sales tax, VAT and other ones.
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