Goods and Service Tax

What is GST in india. It is the short form of Goods and service Tax..To day Corporate and individuals pays taxes for the income they earn .They have to pay for income as income tax. It is a direct tax. Likewise in India there are many indirect taxes. Mainly it applies when we go for sale of materials, production of materials etc. There are taxes to be paid by us for various activities like when we purchase and salesmaterials.. We have to pay Value Added Tax (VAT) on purchasing goods & services. And there are Excise duties, Import Duties, Luxury Tax, Central Sales Tax, Service Tax etc. Service Tax is a form of indirect tax imposed only on services provided. From the point of view of an ordinary man who does not know anything about tax, providing services means assistance in any work, taking up of any work on behalf of others, any professional assignment or rendering intangible benefits to others is attracted by service tax.  Once the turnover of the assesses crosses a threshold limit of Rs 9 lacks, the service provider is required to get itself registered under the law, and compulsorily required to charge service tax on services provided once the turnover crosses Rs 10 lacks. In normal circumstances the Service Tax is charged at the time of rendering services. However, there may be a situation where service tax is charged before rendering services or after completion of service. The important thing to note here is the timing of chargeability and the rate of chargeability. Chargeability arises when services are rendered, while the rate is determined at the time of payment by service receiver. Suppose when services are rendered, the rate is 10.3% on such services. However, when the receiver makes payment, the rate is 12.36%. So, the applicable rate is 12.36.VAT (Value Added Tax is a form of indirect tax imposed only on goods sold within a particular state, which essentially means that the buyer and the seller needs to be in the same state. Only when tangible goods and products are sold, VAT can be imposed.CST (Central Sales Tax) ) is a form of indirect tax imposed only on goods sold from one state to another state, which particularly takes into account that the buyer and the seller needs to be in two different states. Registration is compulsory for dealers having turnover exceeding Rs 5 lacks .On registration, such dealer is allotted a unique 11 digit TIN CST (Central Sales Tax) registration is not dependent on amount of turnover:As of today some of these taxes are levied by the Central Government and some are by the State governments.To streamline all the different types of indirect taxes and implement a “single taxation” system GST ( GST is the abbreviated form of Goods & Services Tax)is now in place. The main expectation from this system is to abolish all indirect taxes and only GST would be levied. As the name suggests, the GST will be levied both on Goods and Services.GST is a consumption based tax/levy. It is based on the “Destination principle.” GST is applied on goods and services at the place where final/actual consumption happens. At present our government has almost finalised the GST. Now it is in the stages of implementation .Hence state governments and central Government are discussing about the same. As of now state governments has got the authority to impose by itself sales tax of states. Hence the sales tax of a particular same material differs from state to state. For example if one state impose 15% for refrigerator it varies in other states since both the states are independent and the sales taxes are their own descriation.What will be the drawback the states will face when GST is imposed. Except the sale price of petrol all other material tax amounts are decided by the central government. It is a setback for the state Governments. Hence discussions are continuing.Some states demand the assesses whose turnover is 1.5 and less must be under state Government and assesses turnover more than 1.5 crores must be under central government .This will enable the Sales tax department of the states will have sufficient work load.One more matter which is discussed between the state government and central government regarding GST is while deciding certain matters regarding GST all the states are given equal amount of voting rights. But some states opposes this and want a change in voting procedure that the percentages must be decided based on the area and population of the states.  Even though the discussions are on the final conclusion on the procedure of imposing GST tax has not yet been finalised. Still talks are on between state and central government. When both state and central government reaches conclusion no doubt GST will be great boon for Indians and sure int will improve the economical situation of India