123ArticleOnline Logo
Welcome to 123ArticleOnline.com!

ALL >> Business >> View Article

Gst Merits Demerits Goods Services Tax Explained

By Author: Mohit Yadev
Total Articles: 102

GST Vs Current Tax structure:
Cascading Effect in GST:
GST Explained with an Example:
Benefits of GST
Few Considerations in GST:
Issues in GST
GST Merits
How will GST benefit Companies?
The need for Goods and Services Tax

GST Goods and Services Tax India Meaning Explained here. Difference between the new GST and Service Tax. What are the benefits and merits of GST. Here we are providing the complete details about Goods and Services Tax introduced by the Indian Government recently. We will also discuss what is GST Credit, Why was it launched and other related matters.
GST was being opposed by different state governments but finally it was made applicable. Now State governments will get a part of GST Tax from the central Government.
GST Vs Current Tax structure:
The difference between GST and the current Tax structure can be easily understood from the following diagram:
Cascading Effect in GST:
Say Mr.X sells goods to Mr.Y after charging sales tax, and then Y re-sells those goods to Z after charging sales tax. While Y was computing his sales tax liability, he also included the sales tax paid on previous purchase, which is how it becomes a tax on tax.
GST Explained with an Example:
See the below picture and the example referring how GST is beneficial:
Benefits of GST
The implementation of GST will help create a common market in India and reduce the cascading effect of tax on the cost of goods and services. It will impact tax structure, tax incidence, tax computation, credit utilization and reporting, leading to a complete overhaul of the current indirect tax system.
Few Considerations in GST:
Under the Bill, alcoholic liquor for human consumption is exempted from GST. Also, it will be up to the GST Council to decide when GST would be levied on various categories of fuel, including crude oil and petrol.
The Centre will levy an additional one per cent tax on the supply of goods in the course of inter-State trade, which will go to the States for two years or till when the GST Council decides.
The primary reason for the bill is to pave the way for the Centre to tax sale of goods and the states to tax provision of services. The bill further proposes that the central government will have the exclusive power to levy GST on imports and inter-state trade.
Issues in GST
GST will not be a cost to registered retailers therefore there will be no hidden taxes and the cost of doing business will be lower. This in turn will help Export being more competitive.
In GST System bothe Central GST and State GST will be charged on manufacturing cost and will be collected on point of sale. This will benefit people as prices will come down which in turn will help companies as consumption will increase.
Critics say that GST would impact negatively on the real estate market. It would add up to 8 percent to the cost of new homes and reduce demand by about 12 percent.
GST Merits
Biggest benefit will be that multiple taxes like octroi, central sales tax, state sales tax, entry tax, license fees, turnover tax etc will no longer be present and all that will be brought under the GST. Doing Business now will be easier and more comfortable as various hidden taxation will not be present.
How will GST benefit Companies?
It will be beneficial for Indian companies. as the average tax burden on companies will fall. Reducing production costs will make exporters more competitive and aggressive. “The most important reform for India, whether it is for our group, for India generally, or for most businesses, will be the goods and services tax. It will add about two percentage points … to India’s GDP growth,” Rahul Bajaj, chairman of the Bajaj Group, told Reuters in November 2012.
The need for Goods and Services Tax
We begin by elaborating on the important concept of — cascading effect of taxes. It is also, logically, referred to as “taxes on taxes”. It is simple to illustrate — say A sells goods to B after charging sales tax, and then B re-sells those goods to C after charging sales tax. While B was computing his sales tax liability, he also included the sales tax paid on previous purchase, which is how it becomes a tax on tax.
Discover More About GST Software.

Total Views: 22Word Count: 691See All articles From Author

Business Articles

1. Top Reasons To Buy A Lamborghini Aventador Super Car
Author: Jason Jones

2. What Are The Most Common Carpet Stains At Your Oahu Home?
Author: Kleenprohawaii

3. Our Mission - Cjs Haritha Homes
Author: 0

4. The Shared Fibers Wallet In-depth Review
Author: Lao Yutang

5. The Worst Things About Orlando Wedding Photography That Budding Wedding Photographers Must Take Into
Author: Vikram Kumar

6. Get The Right Ceo Mailing Lists For Your B2b Targeted Marketing
Author: germany email datasupply

7. Carpet And Upholstery Cleaning In Newport Beach
Author: carpetcleaninginnewportbeach

8. Meishen Hold A Contest Of Tug-of-war
Author: hu Allen

9. Avail Budget Interior Designers In Bangalore For Best Services
Author: johnsdaniey

10. Looking For Quality Dietitian Leads To Grow Your Business? Switch To Averickmedia
Author: Andrew Rayel

11. Buy Most Noteworthy Quality Upvc Item On-line
Author: sandip m

12. Burnerindo Teknik Utama
Author: btu.co.id

13. Huge Profits In Carpet Cleaning Business
Author: Drcarpetirvine

14. Tips For Buying Shin Pads For Kids
Author: Sahah Chan

15. High-quality Yet Affordable Plumbing Services In Durban
Author: Donald Frank

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: