POSSIBLE IMPACT OF GST IN FUTURE
the future of the Goods and Services Tax is still uncertain in India but our
efforts to elaborate the broad concept of "GST" will continue in the same
manner. Even after facing such a huge setback, our Finance Minister Mr. Pranab
Mukherjee is leaving no efforts from
his side for the successful implementation of the GST. He said that there will
not be any reduction in the intensity in the ongoing work relating to GST.
would be one of the most significant fiscal reforms of independent India. It
is expected to replace all indirect taxes, thus avoiding multiple layers of
taxation that currently exist in India.
persons/assesses registered under GST (Manufacturers, Wholesalers and
Retailers and Service Providers) are required to charge GST at the specified
rate of tax on goods and services that they supply to customers. The GST
payable is included in the consideration given by the recipient of the goods
and services. The supplier must deposit this amount of GST with the
Government. If the recipient of goods or services is a registered dealer, he
will normally be able to claim a credit for the amount of GST he has paid ,
provided he holds a proper tax
invoice. This "input tax credit" is setoff against any GST( Output), which
the assesse charges on goods and services, which he supplies , to his
net effect is that dealers charge GST but do not keep it, and pay GST but get
a credit for it. This means that they act essentially as collecting agents for
the Government. The ultimate burden of the tax falls on the last and the final
consumer of the goods and services , as this person gets no credit for the GST
paid by him to his sellers or service providers.
Impacts of GST are:
Many indirect taxes
in state and central level subsumed by GST, you need to pay a single GST
instead of all.
comprehensive and wider coverage of input credit set off, you can use service
tax credit for the payment of tax on sale of goods etc.
Uniformity of tax
rates and legal rulings across the states.
Prices of goods are
expected to reduce in the long run as the benefits of less tax burden would be
passed on to the consumer.
By reducing the tax
burden, the competitiveness of Indian products in international market is
expected to increase and thereby the development of the nation.