Goods and Service Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 31-7-2010 Last Replied Date:- 3-8-2010 – The talks on introduction of goods and service tax (GST) in India from April 2011 have revived with the last meeting of Empowered Committee helf on 21st July 2010. It is expected that GST Bill may be introduced in Parliament session beginning today. Now that India will migrate to dual GST next year (or even after) – one central GST and other state GST, it will fall short of expected objectives. Initially, GST was meant to simplify the structure of indirect taxes in India and move towards a simple, cenvatable unified indirect tax regime. The present discussions however, are base on dual GST which Empowered Committee and centre have agre
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proposed that CGST will be lower rate for goods @ 6% and standard rate at 10%. The services will be charged at 8%. For states, it is proposed to have same rates resulting in total rate for CGST and SGST in the range of 12 to 20 % in first year which may later be brought down to 16 % . Thus, we will have three rates for goods and services both for centre and states separately. This may sound simple but shall lead to more tax outgo for taxpayers. In case of service tax, while present tax rate is 10%, it will go up by 60% to 16 %, 8% for states and 8% for centre. Similarly, tax on goods will also go up to 20% . Moreover, it is still not clear whether all state taxes will be subsumed in GST or only few ones. Information technology shall play a
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GST, the goods and service tax is infact a good but slow tax. – Reply By Vinay Agrawal – The Reply = Thanks Dr. Agarwal for a nice article. As we all know that today we are sitting in the begining of August 2010 and if we really go as per the wishes (wishes only and no clear road map) of Mr. Pranab Mukherjee then we are left with only 8 months. As of now there is absolutely no clarity regarding modus operandi in the new tax regime, no IT infrastructure in place (which of-course can not be there without the relevant rules and procedures), no concensus with states etc.etc. and so many similar issues. Do you think that it will be viable to impose (rather than implementing) the GST in a forceful manner just for the sake of meeting a deadline ?
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