GST and Trade
we are expecting that the new regime GST will have a significant effect on the
Indian Trade and will have a great impact on the day to day business
to FM, a new GST regime will generate the targeted revenues with the
minimization of exemption. It will broaden the tax base and lower the tax
rates. GST is based on destination principle, so the distortions will be
reduced fostering a common market across the country. The compliance cost will
come down and our trade and industry will become more competitive leading to
an increase in exports and lower prices for domestic consumers.
will discuss in brief, the imposition of GST in different sectors/fields
relating to Indian Trade.
we know in GST, major Central and State taxes will be subsumed and complete,
comprehensive set off of input goods and services and phasing out of CST would
reduce the cost of local manufactured goods and services. This will increase
the competitiveness of Indian goods and services in the international market
and thus boost to Indian exports.
GST, Exports would be zero rated. As a result, the exporters will be eligible
to claim the refund of the eligible input tax credits subject to conditions,
limitation and procedures. Similar benefits may be given to Special Economics
Zones (SEZs). Such benefits will only be allowed to the processing zones of
the SEZs. No benefit to the Sales from an SEZ to Domestic Tariff Area (DTA)
will be allowed.
CGST and SGST will be levied on Import of goods and services into the country.
The incidence of tax will follow the principle of destination based tax. The
SGST of that State will be applicable where the goods and services are
consumed. Full and complete set-off will be available on the GST paid on
imports on goods and services.
GST, the relief is given to whom those who have Small businesses. They are out
of the purview of the GST, means that the businesses with an annual turnover
of less than Rs 10 lacs would be exempted from the State GST. This limit is
applicable for both goods and services.
in the interest of small traders and small scale industries and to avoid dual
control, the States considered that the threshold for CGST for goods may be
kept at Rs 1.5 crore and the threshold for services should also be
IT infrastructure requirement will be shared by the Central Government through
the use of its own IT infrastructure facility. The issues of tying up the
State Infrastructure facilities with the Central facilities as well as further
improvement of the States own infrastructure, including TINXSYS, is now to be
addressed expeditiously and in a time bound manner.
beverages would be kept out of the purview of GST. Sales Tax / Vat could be
continued to be levied on alcoholic beverages as is prevailing in the present.
There is no objection if some States impose Vat on it and if impose excise
duty that may also not to be affected.
the other hand, tobacco products would be subjected to GST. Centre may be
allowed to levy excise duty on tobacco products over and above GST.
far as petroleum products are concerned, it is decided that the basket of
petroleum products, i.e. crude, motor spirit (including ATF) and HSD would be
kept outside GST as is the prevailing practice in
final view whether Natural Gas should be kept outside the GST will be taken
after further deliberations.