Goods and Service Tax (GST) – Efficient indirect tax system
By: – CSSwati Rawat
Goods and Services Tax – GST
Dated:- 15-3-2012<\/p>\n
Goods and Service Tax (GST)
\nAs the introduction of the Goods and Service Tax (GST) gathers momentum, the businesses in India have started bracing themselves. GST, which is likely to subsume most of the current indirect tax levies, is expected to be the most efficient indirect tax system in India.
\nGST would be a single comprehensive indirect tax to be levied on goods and services. It would be levied at every production and distribution leg with the eligibility to claim set-off of most indirect taxes on procurement leg. Under the current regime, there is a fractured credit mechanism; businesses don&#<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n n, but many a times such supply chain result in enhanced logistics cost. For instance, to avoid the burden of CST, the businesses open distribution centres in all the States, which lead to additional logistics cost. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n hereas, for services, the cost of tax would go up from 10 per cent currently to 16 per cent under GST. Besides the fact that GST is likely to have an impact on the pricing of goods and services, the cash flow of businesses may result in favourable swing. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Goods and Service Tax (GST) – Efficient indirect tax systemBy: – CSSwati RawatGoods and Services Tax – GSTDated:- 15-3-2012 Goods and Service Tax (GST) As the introduction of the Goods and Service Tax (GST) gathers momentum, the businesses in India have started bracing themselves. GST, which is likely to subsume most of the current indirect … Continue reading “Goods and Service Tax (GST) – Efficient indirect tax system”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-506","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/506","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=506"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/506\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nWith the introduction of GST, the businesses may re-define their supply chain and structure the same in a most economic and efficient manner without worrying about the indirect taxes – for example, the businesses may not need to open distribution centres or warehouses in each and every State; they can operate from a place most convenient for their business from a commercial perspective. This would not only allow the businesses to save the inventory and warehousing cost but would also reduce the unwarranted compliance requiremen<\/p>\n
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\nUnlike the current regime, no input tax would become cost under GST and could be set-off against the output tax liability instead of cash payment.
\nREVAMP OF BUSINESSES
\nGST would not just require the businesses to re-define the supply chain but also to re-design their accounting and IT systems. The transformation would require the businesses to revise the formats of invoices, purchase\/sales registers, stock registers, reporting declarations to factor the changes under the GST regime. The <\/p>\n
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