Various speculations have been going around GST since the time it’s implementation date has been announced. Almost each business owner is confused about what is this tax all about and how it’s going to affect their business.
Here is some bit of research we did to throw some light on this most talked about topic:
What Is It?
Goods & services tax is an all inclusive tax which is being introduced to eliminate majority of other indirect taxes. It aims towards making India one unified common market by standardizing taxation across the country. To be precise it will subsume all state & central taxes to minimize the cascading effect of tax, where tax on a tax will no longer be levied. So for eg. VAT is levied on excise too which means one tax on another and this will be clubbed into a single tax that is GST- Goods & Services Tax.
India is going forward with dual GST tax model where state & central government will consider a common tax base to levy GST.
Intra-state supply of goods & services: Both State GST (SGST) & Central GST (CGST) shall be charged and will be deposited to state government & central government respectively.
Inter-state supply of goods & services: Integrated GST (IGST) shall be charged which is implemented by Central Government. State can claim the credit over all such inter-state transactions.
When will be GST implemented?
GST is effective from 1st July 2017.
What you need to do?
Existing sellers/dealers: Sellers having registered state VAT/CST won’t have to apply for a new one under GST. You will simply have to get it migrated into the new GST process.
New sellers/dealers: Sellers without a registered state VAT/CST shall have to file for it under the new GST process. The process can be done online easily using your PAN as against both CGST and IGST registrations.
Stay tuned for more information on GST!