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GST to Overpass Every Existing Tax Very Soon

GST

GST – A boon or a bane will be decided in future but speculations regarding its implementation has already shook the paradigm of various industries. The much awaited Goods and Services Tax has received green signal from Rajya Sabha in light of “One nation, one Tax”. Undoubtedly, GST has its own perks that brought its effectiveness yet the anxiety over the probable levied rate remains intact. The two main components have been formulated namely, the Central GST and the State GST in lieu of uniform and seamless markets across the country.

Now all the real taxes in form of VAT/ CST or excise duty or service tax are going to bid adieu as the only applicable tax would be Goods and Services Tax. This system would ensure better transparency as input credits available for redemption would involve no discrepancies. Further a uniform tax system would enable lowering of costs, eventually benefiting the lowest of chain id est “buyer”. Additionally, the transcription of black money would reduce in light of elevated need for financial documentation. Sectors like Automobiles, Multiplexes, FMCG, Logistics, Cement or Retail are going to be in white area with the existence of this uniform tax as its application would lead to high end sales and increase demand.

At the same time it is necessary to keep the rates moderate otherwise the main purpose of GST would defeat. Telecom or Consumer staples and discretionary markets are on the grey side as impact of indirect tax in these areas is marginal. It is also anticipated that such companies may end-up paying higher taxes than currently paying as service tax rate is currently 15% approx.

However GST may not apply on Alcoholic Liquor for human consumption, Petroleum Crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel until the announcement is made by the GST Council.

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