What is GST ( Goods and Services Tax ) & How it will affect you - Fourrwalls.com
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Transcript of What is GST ( Goods and Services Tax ) & How it will affect you - Fourrwalls.com
GST
( Goods & Services Tax ) Biggest Tax Refor Si ce I depe de ce…
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What is GST?
Eliminating the cascading effects of taxes.
Tax rates would be comparatively lower.
Reduce tax evasion and increase the revenue and GDP by widening the tax base.
There would be seamless flow of the input tax credit.
Price of the goods and the services would fall.
There would efficient supply chain management.
It would promote the shift from unorganized sector to organized sector.
It would eliminate 17 indirect taxes and therefore the compliance cost would fall.
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The tax structure will be made lean and simple.
The entire Indian market will be a unified market which may translate into lower
business costs.
It is good for export oriented businesses. Because it is not applied for
goods/services which are exported out of India.
In the long run, the lower tax burden could translate into lower prices on goods
for consumers.
The Suppliers, manufacturers, wholesalers and retailers are able to recover GST
incurred on input costs as tax credits.
It can bring more transparency and better compliance.
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Advantages of GST
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Manufacturer
Wholesaler
Retailer
Consumer
Sells to
Sells to
Sells to
Collects GST from Wholesaler and pays to Customs
Collects GST from Retailer and pays to Customs and Claims GST back for
payment to manufacturer
Collects GST from Consumer and pays to Customs and Claims GST
back for payment to Retailer
Pays GST to Retailer
How does GST work?
Types of GST
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Goods Supplied or Services Provided
Intra State
( Within the State )
Inter State
( Outside the State OR
Between Two States )
IGST
( Integrated GST ) & Additional Tax*
CGST
( Central GST )
SGST
( State GST )
CGST SGST IGST
Meaning
CGST means Central Goods
and Services Tax to replace
the existing tax like service
tax, excise etc and It is
levied by central
government
SGST means State Goods
and Services Tax, replace
the existing tax like sales
tax, luxury tax, entry tax etc
and It is levied by the
government
IGST refers to the
Integrated Good and
Services Tax and It is a
combined form of CGST
and IGST and It is levied by
central government
Collection of
Tax Central Government State Government Central Government
Applicability Intra-State Supply Intra-state Supply Interstate Supply
Registration
No registration till the
turnover crosses 20 Lakh
( 10 Lakh for north eastern
states )
No registration till the
turnover crosses 20 Lakh
( 10 Lakh for north eastern
states )
Registration is mandatory
Composition
The Dealer can use the
benefit up to 75 Lakh under
the composition scheme
The Dealer can use the
benefit up to 75 Lakh under
the composition scheme
The composition scheme is
not applicable in interstate
supply
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Taxes Subsumed under CGST,SGST and IGST
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GST Tax Rates
GST Rates Effective From July 01st, 2017
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Tax Rate Items
0 % Commodities such as Food Grains, Rice and Wheat are included
5 % Under which mass consumption products are included such as Mustard Oil, Tea & Spices
12 % Under which processed Food has been included.
18 % Under which consumer Goods has Toothpaste, Refrigerator & Smartphone’s etc
28 % Under which Luxury items such as Cars & Secondly Tobacco & Aerated Drinks are included
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