GST Bill passed: Still confused about how it will impact you? Check out this simple chart


Taxes are indeed a difficult subject for aam aadmi. It looks like a maze of legalese and maths, signifying nothing much. With the GST, the government is aiming to simplify it for the general public.

GST Bill passed: Still confused about how it will impact you? Check out this simple chart

The government explains the GST in simple terms in the recenlty published frequently asked questions.

Here’s what it has to say: GST is one indirect tax for the whole nation, which will make India one unified common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.

In other words, the prices that we pay for goods and services have the taxes embedded in them. Mostly, the consumers are not even aware of or ignore the tax they pay for things they buy.

This is because there is a maze of indirect taxes such as sales tax, excise and VAT, which leads to increased complexity. The GST seeks to untangle this and subsume all in one single tax, thereby making India an economically unified market.

The Empowered Committee of State Finance Ministers, which deliberated on the tax and its implications, has recommended what all taxes are to be subsumed in the GST:

In the Central taxes: 1) Central Excise Duty; 2) Additional Excise Duties; 3) The Excise Duty levied under the Medicinal and Toiletries Preparation Act Service Tax; 4) Additional Customs Duty, commonly known as Countervailing Duty (CVD); 5) Special Additional Duty of Customs – 4% (SAD); 6) Surcharges, and 7) Cesses.

Among the state taxes and levies: 1) VAT / Sales tax; 2) Entertainment tax (unless it is levied by the local bodies); 3) Luxury tax; 4) Taxes on lottery, betting and gambling; 5) State Cesses and Surcharges in so far as they relate to supply of goods and services; and 6) Entry tax not in lieu of Octroi.

Source From : firstpost.com

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