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Understanding the Intricacies of GST While Buying a Home

Understanding the Intricacies of GST While Buying a Home

Intricacies of GST

House, a place we stay in, a place we call home, the place that shelters us, is one of the basic requirements. People can’t just stop buying houses just because a 12% or 18% GST is being levied on it, this need is one that cannot be done away with and so this article aims to help all those homebuyers take a decision about the most feasible and easy on the pocket option for them.

Since after the roll out of GST, purchase of any developed plot or apartment attracts 12% GST, however, the purchase of a housing unit in a completed project, which has received occupation certificate (OC) or where registry can be done is exempt from GST.

However, if the OC has only been applied for, but has not been issued by the Authority the buyer will be subject to 12% GST of the total value of the apartment. Therefore, a project which has received OC is less expensive than the one that has not received the OC merely owing to the applicability of GST at 12%.

Once the developer receives the OC, he will be required to get the registry of the housing unit done however he will only be allowed to get it done if he has cleared all the dues against the project.

GST was introduced with the aim of reduction in prices by availing input tax credits and passing it on to the customer. So a developer whose project has been completed but has not received the OC yet, can avail tax credit of 2.40% of the cost by simply submitting the invoices and bills of the purchase inputs like cement, steel, etc. this credit will be paid out to the developer from the taxes that the buyer will pay for the final apartment.

However, this tax credit can be availed by developers only for the taxes paid by them after July 1 i.e. after the rollout of GST and also if the entire project was implemented after July 1st. According to the Govt. the benefits are shifted on to the consumer and it will result in reduced prices of a medium and affordable range of housing units.

On the other hand, prices of premium ranged housing units are expected to rise substantially.

A developer whose project was partially complete and under construction as on July 1, can claim tax credit as well however such tax credit can only be availed only on certain inputs and taxes paid after July 1thereby reducing the benefit being passed on to the developer to the consumers.


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GST impact: As car prices fall by way of up to Rs 3 lakh, check out which all grew to become inexpensive

GST impact: As car prices fall by way of up to Rs 3 lakh, check out which all grew to become inexpensive

GST Impact : car prices

Auto companies are adjusting the prices of their products after the government rolled out goods and services tax (GST) on 1 July.

Under the GST rates, cars will attract the top rate of 28 percent with a cess in the range of 1 to 15 percent on top of it.

While small petrol cars with engine less than 1,200 cc will attract 1 percent cess, that with a diesel engine of less than 1,500 cc will attract 3 percent cess.

Large cars with engine greater than 1,500 cc and SUVs with length more than 4 metres and engine greater than 1,500 cc will attract cess of 15 percent over and above peak rate of 28 percent.

Hybrid vehicles will also fall in the category under GST. In comparison, tax on electric vehicles has been kept at 12 percent. At present hybrid vehicles attract excise duty of 12.5 percent, similar to the ones on entry level small cars such as Tata Nano or Maruti Alto.

Earlier, the tax incidence on cars ranged between 28 percent and 45 percent. Under GST, the maximum rate is 43 percent.

Here’s how companies are reacting to the GST rollout:

Maruti Suzuki

The country’s top automaker Maruti Suzuki India (MSI) cut prices of most of its models by up to 3 percent. It has cut the price of the Alto in the range of Rs 2,300 to Rs 5,400, the WagonRRs 5,300-Rs 8,300 and that of the Swift between Rs 6,700 and Rs 10,700.

It has also reduced the price of the Baleno in the range of Rs 6,600 and Rs 13,100 and that of the Dzire ranging between Rs 8,100 and Rs 15,100.

Representational image. Reuters

Price of Ertiga petrol has been cut by up to Rs 21,800 while that of petrol powered Ciaz by up to Rs 23,400. The SUV Vitara Brezza has become cheaper by Rs 10,400-14,700, while the S-crossby Rs 17,700-21,300.

However, the Ciaz and Ertiga models with smart hybrid technology have become costlier due to withdrawal of tax concessions on mild hybrid vehicles under the GST. Diesel versions of the sedan Ciaz and MPV Ertiga with mild hybrid technology saw prices increase by over Rs 1 lakh.

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Toyota Kirloskar Motor

The company cut prices ranging between Rs 10,500 and Rs 2.17 lakh (ex-showroom Bengaluru).

It has reduced prices of all new Fortuner by up to Rs 2.17 lakh, Innova Crysta by up to Rs 98,500 and Corolla Altis by up to Rs 92,500, Platinum Etios by Rs 24,500 and that of Etios Liva by up to Rs 10,500.

However, the prices of hybrid variants Toyota Camry and Toyota Prius increased by Rs 3.5 lakh in Bengaluru and up to Rs 5.24 lakhs in Delhi as per applicable tax under GST.

Honda Cars India

The company cut the prices of its models by up to Rs 1.31 lakh.

The company has cut price of its hatchback Brio by up to Rs 12,279 and that of the compact sedan Amaze by up to Rs 14,825. It has slashed price of the Jazz by up to Rs 10,031 and that of its recently launched model WR-V by up to Rs 10,064.

The mid-sized sedan City has seen a reduction in the range of Rs 16,510 and Rs 28,005. The BR-V prices will come down by up to Rs 30,387.

The premium SUV CR-V has also seen a price drop of up to Rs 1,31,663.

Honda is yet to decide on the revised pricing of Accord Hybrid. The revised prices are for ex-showroom Delhi and will vary from state to state.


The company has cut the prices by up to 4.5 percent. The steepest cut will be in Mumbai with the company’s flagship SUV Endeavour becoming cheaper by up to Rs 3 lakh.

In Delhi, the price of Figo has been cut by Rs 2,000, that of the compact SUV Ecosport by up to Rs 8,000, and the SUV Endeavour by up to Rs 1.5 lakh.

In Mumbai, the prices will go down in the range of Rs 28,000 on the Figo to Rs 3 lakh on the Endeavour.

TVS Motor

The two-wheeler major TVS Motor Company has reduced prices of its models by up to Rs 4,150 to hand down GST benefit to customers.

Honda Motorcycle and Scooter India

The company has slashed prices of its products by up to Rs 5,500 depending on model and state

Hero MotoCorp

The company has cut prices by up to Rs 1,800. The company sells a range of bikes priced between Rs 40,000 and Rs 1.1 lakh. It said, in one or two states, such as Haryana, where the pre-GST rates were lower than the post-GST rate, the prices of a few models may go up marginally.


The German luxury car maker cut prices ranging from Rs 70,000 on base end version of X1 to Rs 1.8 lakh on the top end of its sedan 7 series.

However, the hybrid model i8 will witnessed a hike of Rs 4.8 lakh to Rs 2.28 crore.

Jaguar Land Rover

The Tata Motors-owned company has reduced prices of its entire vehicle range in India on an average by 7 percent.

The Jaguar portfolio in India includes XE with a starting price of Rs 34.64 lakh, XF starting at Rs 44.89 lakh, F-PACE Rs 67.37 lakh onward and XJ with a starting point of Rs 97.39 lakh (ex-showroom prices across India).

On the other hand, the Land Rover range includes the Discovery Sport starting at Rs 40.04 lakh, Range Rover Evoque at Rs 42.37 lakh upward, Range Rover Sport beginning at Rs 89.44 lakh and Range Rover with a starting price point of Rs 1.59 crore (ex-showroom in India).

Mercedes Benz

The company has cut prices of its vehicles produced in India by up to Rs 7 lakh.

Mercedes Benz India locally produces nine models — CLA sedan, SUVs GLA, GLC, GLE and GLS, luxury sedans C-Class, E- Class, S -Class and Maybach S 500 — which are priced between Rs 32 lakh and Rs 1.87 crore (ex-showroom Delhi).

The price reduction ranges from Rs 1.4 lakh on the CLA sedan to Rs 7 lakh on Maybach S 500. Price reduction varies by state between 2 percent to 9 percent and is dependent on current tax
structure and local body taxes of states, the company said.

Latest Updates on GST – Goods and Services Tax Info‎‎‎


Source: firstpost
A quick guide to India GST rates in 2017

A quick guide to India GST rates in 2017

The GST Council, the apex decision-making body for the new tax, has fixed the tax framework under the Goods and Services Tax (GST) which is to be rolled out this July 1. Tax rates have been finalised for 1,211 items with a majority of items being kept under the 18 per cent slab.

Here’s a complete list of GST rate card.

Nil rate (0%):
No tax will be imposed on items like fresh meat, fish chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, flour, besan, bread, prasad, salt, bindi. Sindoor, stamps, judicial papers, printed books, newspapers, bangles, handloom etc.

5% Tax Rate:
Items such as fish fillet, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, kerosene, coal, medicines, stent, lifeboats will attract tax of 5 percent.

12% Tax Rate:
Frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, Bhutia, namkeen, Ayurvedic medicines, tooth powder, agarbatti, colouring books, picture books, umbrella, sewing machine, and cellphones will be under 12 per cent tax slab.

18% Tax Rate:
Most items are under this tax slab which include flavoured refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, mineral water, tissues, envelopes, tampons, note books, steel products, printed circuits, camera, speakers and monitors.

28% Tax Rate:

Chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with choclate, pan masala, aerated water, paint, deodorants, shaving creams, after shave, hair shampoo, dye, sunscreen, wallpaper, ceramic tiles, water heater, dishwasher, weighing machine, washing machine, ATM, vending machines, vacuum cleaner, shavers, hair clippers, automobiles, motorcycles, aircraft for personal use, and yachts will attract 28 per cent tax – the highest under GST system.

GST Assessment and Audit Rules 2017

GST Assessment and Audit Rules 2017


1. Provisional Assessment

(1) Every registered person requesting for payment of tax on a provisional basis in accordance with the provisions of sub-section (1) of section 60 shall furnish an application in FORM GST ASMT-01, along with the documents in support of his request, electronically through the Common Portal, either directly or through a Facilitation Centre notified by the Commissioner.

(2) The proper officer may, on receipt of the application under sub-rule (1), issue a notice in FORM GST ASMT-02 requiring the registered person to appear in person or furnish additional information or documents in support of his request and the applicant shall file a reply to the notice in FORM GST ASMT – 03.

(3) The proper officer shall issue an order in FORM GST ASMT-04, either rejecting the application, stating the grounds for such rejection or allowing payment of tax on provisional basis indicating the value or the rate or both on the basis of which the provisional assessment is to be made and the amount for which the bond is to be executed and security to be furnished not exceeding twenty five per cent. of the amount covered under the bond.

(4) The registered person shall execute a bond in accordance with the provisions of subsection (2) of section 60 in FORM GST ASMT-05 along with a security in the form of a bank guarantee for an amount as determined under sub rule (3):

Provided that a bond furnished to the proper officer under the Central/State Goods and Services Tax Act or Integrated Goods and Services Tax Act shall be deemed to be a bond furnished under the provisions of this Act and the rules made thereunder. Explanation.- For the purposes of this rule, the term “amount” shall include the amount of integrated tax, central tax, State tax or Union territory tax and cess payable in respect of such transaction.

(5) The proper officer shall issue a notice in FORM GST ASMT-06, calling for information and records required for finalization of assessment under sub-section (3) of section 60 and shall issue a final assessment order, specifying the amount payable by the registered person or the amount refundable, if any, in FORM GST ASMT-07.

(6) The applicant may file an application in FORM GST ASMT- 08 for release of security furnished under sub-rule (4) after issue of order under sub-rule (5).

(7) The proper officer shall release the security furnished under sub-rule (4), after ensuring that the applicant has paid the amount specified in sub-rule (5) and issue an order in FORM GST ASMT–09 within a period of seven working days from the date of receipt of the 2 application under sub-rule (6).

2. Scrutiny of returns

(1) Where any return furnished by a registered person is selected for scrutiny, the proper officer shall scrutinize the same in accordance with the provisions of section 61 with reference to the information available with him, and in case of any discrepancy, he shall issue a notice to the said person in FORM GST ASMT-10, informing him of such discrepancy and seeking his explanation thereto within such time, not exceeding fifteen days from the date of service of the notice, as may be specified in the notice and also quantifying the amount of tax, interest and any other amount payable in relation to such discrepancy.

(2) The registered person may accept the discrepancy mentioned in the notice issued under sub-rule (1), and pay the tax, interest and any other amount arising from such discrepancy and inform the same or furnish an explanation for the discrepancy in FORM GST ASMT-11 to the proper officer.

(3) Where the explanation furnished by the taxable person or the information submitted under sub-rule (2) is found to be acceptable, the proper officer shall inform the registered person accordingly in FORM GST ASMT-12.

3. Assessment in certain cases.

(1) The order of assessment made under sub-section (1) of section 62 shall be issued in FORM GST ASMT-13.

(2) The proper officer shall issue a notice to an unregistered taxable person in accordance with the provisions of section 63 in FORM GST ASMT-14 containing the grounds on which the assessment is proposed to be made on best judgment basis and after allowing a time of fifteen days to such person to furnish his reply, if any, pass an order in FORM GST ASMT- 15.

(3) The order of summary assessment under sub-section (1) of section 64 shall be issued in FORM GST ASMT-16.

(4) The person referred to in sub-section (2) of section 64 may file an application for withdrawal of the summary assessment order in FORM GST ASMT–17.

(5) The order of withdrawal or, as the case may be, rejection of the application under subsection (2) of section 64 shall be issued in FORM GST ASMT-18.

4. Audit

(1) The period of audit to be conducted under sub-section (1) of section 65 shall be a financial year or multiples thereof.

(2) Where it is decided to undertake the audit of a registered person in accordance with the provisions of section 65, the proper officer shall issue a notice in FORM GST ADT-01 3 within the time specified in sub-section (3) of the said section.

(3) The proper officer authorized to conduct audit of the records and books of account of the registered person shall, with the assistance of the team of officers and officials accompanying him, verify the documents on the basis of which the books of account are maintained and the returns and statements furnished under the Act and the rules made there under, the correctness of the turnover, exemptions and deductions claimed, the rate of tax applied in respect of supply of goods or services or both, the input tax credit availed and utilized, refund claimed, and other relevant issues and record the observations in his audit notes.

(4) The proper officer may inform the registered person of the discrepancies, if any, noticed as observations of the audit and the said person may file his reply and the proper officer shall finalise the findings of the audit after due consideration of the reply furnished.

(5) On conclusion of the audit, the proper officer shall inform the findings of audit to the registered person in accordance with the provisions of sub-section (6) of section 65 in FORM GST ADT-02.

5. Special Audit

(1) Where special audit is required to be conducted under section 66, the officer referred to in the said section shall issue a direction in FORM GST ADT-03 to the registered person to get his records audited by the chartered accountant or cost accountant specified in the said direction. (2) On conclusion of special audit, the registered person shall be informed of the findings of special audit in FORM GST ADT-04.

Our common market: GST has crossed a critical milestone but many challenges still lie ahead

Our common market: GST has crossed a critical milestone but many challenges still lie ahead

Lok Sabha on Wednesday approved four Goods and Services Tax (GST) legislation, marking a critical milestone in the second phase of the legislative journey to actualize this tax system. Their aim is to transform India’s indirect tax architecture to create a common market by dismantling fiscal barriers between states. Credit for progress thus far should go to all political parties and particularly state governments who have been willing to give up exclusive jurisdiction over their most important taxes for the greater common good. But much work still remains to be done and all stakeholders need to pull together for it.

The four legislations bring out the GST superstructure – they pertain to the Centre, Union territories, inter-state movement of goods and services, and compensation for states in the event tax collected in the GST regime falls short of what was raised earlier. Next, state governments need to get their state assemblies to clear legislation which is consistent with the Centre’s GST structure.

These legislations are not enough to complete the journey. Tax by its nature is detail-oriented. Inattention to details can undo the overarching aim of tax legislation. Therefore, the Centre and states have to cover considerable ground on the rules which will flesh out GST. This area will need careful handling by the Centre as states today levy different tax rates on products. Political stakeholders need to show maturity and keep in mind that GST will eventually benefit the entire economy. In addition to safeguarding interests of the exchequer, political stakeholders need to engage businesses and consumers more actively. Working groups established by the Centre are already engaging specific sectors of the economy such as banking to ensure that the transition to GST does not disrupt business. But a lot more discussion may be needed for a smooth transition.

The journey to GST has been marked by ups and downs as progress has often been impeded by politics of the day. In the end, India’s political class has shown the maturity to move ahead keeping in mind the larger national interest. It is important that all channels of communication are kept open now, particularly with other stakeholders such as industry and consumers. The sheer scale of transition makes it necessary for lawmakers to constantly absorb feedback from others. Eventually, benefits of a common market will go a long way in making India a more productive economy.

Source : Times of India

Truck queues at state borders check posts may end soon

Truck queues at state borders check posts may end soon

Truck queues

Traffic congestion at border check posts could be a thing of the past with the GST Council setting up a task force, to ensure seamless movement of freight across the country and reduce losses to the economy, due to frequent stoppages.

A study conducted by IIM-Kolkata has estimated loss to the economy due to delays at border check posts at $6.6 billion, apart from the cost of fuel due as transporters deal with documentation of nearly 20 state and Central government agencies. Another study undertaken by the road transport ministry has revealed that less than 1% of trucks were detained for not having proper documentation.

 Several states such as Maharashtra, Rajasthan and Haryana have done away with physical checks at border posts on some vital freight routes and instead rely on flying squads. This has significantly cut down delays at border check posts, sources said. Introduction of the Goods & Services Tax (GST), a key reform measure, is expected to usher in seamless movement of goods across the country but border check posts remain an irritant. An analysis of the pile-up at border check posts has shown the delays are largely due to physical verification of documents by state commercial tax and transport departments.
 Sources said the proposed task force would comprise officers from finance and transport departments of some states, the ministry of road transport and highways and the department of revenue to examine the “issue of creating an eco-system for seamless freight movement.” It is expected to submit its report to the council, which may call for a meeting of the state finance and transport ministers to discuss the issues and decide on the mechanism for “seamless road connectivity.”While the e-bill proposed under the GST regime is expected to support seamless movement from the point of view of the commercial tax department, but if the practice of transport documentation checks is continued, it is unlikely to reduce congestion at checkpoints and ensure “barrier free freight transport across the country.” There are various options to reduce pile-up at check posts. For example, the “Vahan” database of the road transport ministry is used to generate bills by the Goods & Services Tax Network, the IT backbone which will manage GST.
The radio frequency identification (RFID) tags installed on vehicles can be used for checking the identity of vehicles, and the effort should be focused on reducing physical checks and eliminate check posts.
Source : TOI
GST: Regime imperfect, but there is time to fix the flaws

GST: Regime imperfect, but there is time to fix the flaws

The GST rate structure needs to be announced soon as companies will need to make corresponding adjustments to their business models and budgets


The last GST Council meeting (the eleventh since the Council’s inception), though scheduled for two days, got concluded in a day as the revised CGST and IGST Laws were approved by the Council. The proceedings turned out to be very productive and many a decision regarding composition scheme for small hotels and restaurants, raising the cap of GST rate to 40% (CGST+SGST), etc, were taken at the meeting. In the next meeting, scheduled for March 16, the SGST Law and the Union Territories GST (UTGST) Law would be discussed and agreed upon. While the four Central laws, namely CGST, IGST, UTGST and GST Compensation Bill would be approved by the Union Cabinet before they are presented in Parliament, respective state assemblies have to pass their SGST Laws with simple majority. This might pose a big challenge for the July 1, 2017, deadline as all the states need to pass the SGST Law in their respective assemblies as also notify the rules and forms well before the implementation date. As it is seen now, it might be a photo finish!

In all the melee, the crucial discussion on GST rates is yet to happen. Also, the changes to the CGST and IGST Laws as agreed upon by the Council have not been shared with industry, clearly to save time on one more round of representations. In fact, it would be prudent to share these changes now as the suggestions, if any are to be made to the CGST Laws, need to be reflected in the SGST Laws as well in toto. If the changes suggested by industry to the CGST law are reflected in the draft SGST laws before they get presented in the respective state assemblies, uniformity in both the Laws can be maintained easily. Else, it would be a long drawn logistical process to carry out the amendments in each and every SGST Law after it is passed by the state legislatures. This might delay the roll out of the Goods & Service Tax.

Industry is waiting with bated breath for the draft GST rates to be announced. This is because of a variety of reasons. Most of the businesses in India firm up their budgets for the next financial year well before the beginning of the new financial year. These budgets include the procurement budgets, sales budgets, capital expenditure budgets, etc, among other budgets. Industry is currently guess-estimating the GST components on various products and services in the absence of any formal communication from the government. On top, an anti-profiteering clause has been added in the Model GST Law which would compel taxpayers to pass on the benefits arising out of lowering of GST rate or increase in input tax credits to customers. Now, it is apparent that all the service providers would be getting incremental input tax credit of the SGST paid on inputs and capital goods used for providing services, which hitherto was not allowed as they were not subjected to state VAT. Similarly, all traders in goods who were ineligible to take credit of CENVAT paid on input services in the current service tax regime would be able to claim input tax credit of GST paid on input services in the GST regime.

These and many such examples can be cited where there would be substantial savings in the input costs. However, businesses have spent time and money in getting ready for the switch over to the GST. Many have been working on the transition for couple of years. Further, training of staff, changing IT systems, increased compliance costs, etc, are the key incremental expenses incurred/to be incurred by businesses in embracing goods and service tax. Can these expenses be off-set against the savings accruing due to GST rates and GST credits? What is the proportion of the savings that needs to be passed on to various class of customers? Before introducing such a clause, all the facets need to be deliberated and discussed. It is estimated that not less than 6 million taxpayers would be registered under GST. One can imagine the magnitude of this clause and the mechanism that would be required to track compliance of the same.

That India would be implementing an imperfect GST, wherein crucial sectors like oil & gas, electricity, have been left out of the GST net and they have to continue with the perils of the complex indirect structure that we currently have, is a foregone conclusion. The GST dream and the promise made more than a decade ago on bringing in a flawless GST has withered away over the years, owing to various concessions and deliberations to bring everyone on board. However, there is still a window to correct many flaws and this can make the GST less imperfect. It is up to the rejuvenated government to reconsider its earlier decisions and make quick amends. Especially, the decisions which were insisted upon by the states can be relooked now that the majority of the states have become like-minded. Surely India deserves a much better version of the GST when the wait has been of more than a decade?

The achievements of the Council in such a short time are certainly laudable. In order to get the ball rolling faster on Good and Service Tax, all stakeholders now need to switch to the top gear and ensure that they get things done without any further delay. Now that the dust of the poll results in five states has settled, all hands now need to be on the deck for implementing GST on July 1, 2017!

Source :
Information Technology may remain one of the biggest challenges for GST implementation

Information Technology may remain one of the biggest challenges for GST implementation

Many Indian companies including some of the largest ones are struggling to update their tech infrastructure to implement the GST (goods and services tax), say industry experts.Information Technology may remain one of the biggest challenges for GST implementation

The biggest hurdle is the co-ordination between tax experts and the technology teams in introducing and tweaking the IT systems. In many cases some of the ERP software that were provided by the IT majors has to be redesigned as the GST rules keep updating.

Companies are mainly upgrading their enterprise resource planning (ERP) — a category of business-management software — so as to accommodate the complexities of calculating GST. ERP helps companies manage and monitor everything in the organisation, including supply chain, finance and even human resource functions. SAP and Oracle are the big players in the Indian ERP space. Many companies will have to move from their current system, where every transaction is recorded separately, to an upgraded system where there is a correlation between every entry, according to industry executives.

Many companies are also setting up teams that would include a tech expert from their vendors, an indirect tax expert and a finance department executive.

Several Indian companies have again begun discussions with their IT vendors and tax advisors to upgrade their systems to enable tracking of goods and analysis of tax and other cost implications once the GST regime comes into force.

ERP systemsBSE -4.99 % are extensively used by goods manufacturers, especially for supply-chain management. For instance, many retailers use the ERP systems to check movement of goods from the warehouse to the retailer. So if a soap manufactured in Himachal Pradesh reaches a mall in New Delhi, the ERP records every stage of the movement, including the goods carrier’s passage through check points.

Source :
Benefits of GST (Goods and Services Tax) For Industry and Consumer

Benefits of GST (Goods and Services Tax) For Industry and Consumer

There is much hype about the GST (Goods and Services Tax). The governments have struggled a lot for this. Let us understand The benefit of GST. We should know whether it is beneficial for consumer or not? What benefit would industry get? How will it affect the small businessman?

Let us know about the classes which would be affected by the GST.

Following these classes which would be affected by the GST.

  1. Corporates –Because it pays the excise duty. The GST replaces excise duty as well
  2. Transporter– Because it pays Octroi/entry tax. The GST subsumes this tax.
  3. Distributor– It pays VAT. The GST replaces VAT.
  4. Retailer –It pays VAT and service tax. The GST Replace these taxes as well
  5. Consumer –Because indirect taxes affects the price of a product.

GST Benifits

GST Benefits For Business and Industry :

The Goods and Services Tax would benefit the industry most. That is why the industry was demanding it for a long time. A study tells that Because of the GST, the industry would grow rapidly. Which in turn would increase the GDP by 2%. Following are the benefits of GST to the industry and Businesses

Reduce Hassle and Expense:

The GST not only replaces various taxes but also It would be easier for the businessmen. Currently, a Businessman has to various taxes, file return and reply for the scrutiny. The businessman has to visit many tax offices. The GST would end all these hassles.

There would be an advanced IT platform for the GST. It will handle the all related issue of GST. This platform would be used in the whole country. This platform would facilitate Single registration, Single payment, and Single return. All the process would be online. It would make the whole system of GST payment and return filing easy and transparent.

One GST Rate And One Mechanism:

GST ensures that indirect tax rates and structures are common across the country. A product has one GST rate across the country. Businesses are not required to calculate differently for different states. The Same Rule and the Same rate Across the country.

No Overlapping of Taxes:

If a product is produced and sold to the consumer, there would be a single indirect tax. There is no overlapping of taxes. If the GST rate is 20% and product is sold to a consumer for Rs 200, the GST would be Rs 40.

The total GST paid by the manufacturer, distributor, and retailer would never exceed the Rs 40. Out of this Rs 40, every player would pay their part of GST.

The government ensures this by the system of the tax credit. In the above example, a retailer who is liable to pay 20% of GST would not actually pay the Rs 40. Rather, he can reduce some tax because manufacturer and distributor would have paid GST on the same product.

The GST paid for the same product can be claimed as the tax credit. The retailer would deduct this tax credit from its total tax liability. Thus, The retailer might pay only Rs 20 as manufacturer and distributor would have paid remaining Rs 20.

This system of seamless ‘tax-credits’ reduces hidden costs of doing business.

GST Improves competitiveness:

Reduction in transaction costs of doing business improves competitiveness for the trade and industry.

The GST helps those businesses which have been paying right taxes. Since GST will minimize the tax evasion, the good business would become more competitive.

Gain to manufacturers and exporters:

The GST would decrease the cost of locally manufactured goods because of the following reasons.

  • Most of the central and state taxes would go away
  • Central Sales Tax would not be charged
  • Complete and comprehensive set-off of the input goods and services

Because of the reduced cost of Indian industry, It would be more competitive in global market. It will give a boost to Indian Exports.

GST Benefits For Central and State Governments

 Simple and easy to administer:

GST replaces multiple indirect taxes at the Central and State levels. Backed with a robust end-to-end IT system, GST would be simpler and easier to administer than all other indirect taxes of the Centre and State. All the management of GST would be handled by the GSTN. Also there are lots of GST e-filing software which can be helpful for file GST returns.

Better control on leakage:

Because of the Advanced IT platform, it would be difficult to evade GST. The system of GST also promotes the tax payment.

A businessman can claim tax credit only if it has the tax invoice for the purchase. If it doesn’t have tax invoice of a purchase, It has to bear whole tax. Thus, a retailer would ask tax invoice from the dealer and in return dealer would ask tax invoice from the manufacturer.

The in-built mechanism in the design of GST incentivizes tax compliance by the traders.

Higher revenue efficiency:

GST is expected to decrease the cost of tax collection. It will lead to higher revenue efficiency. The duplication of indirect tax collection would end after the GST. It would finally decrease the cost of revenue collection. Both, the centre and state government would benefit.

GST Benefit to the Consumer

GST Would Decrease Tax on Certain Product and Services:

Since there are only three rates of GST. Many products would come into lower tax band. Such as watching a film or buying luxury goods would be cheaper.

Since, there is no overlapping of taxes, the overall tax on a product would go down. It would also lead to lower prices.

Relief in overall tax burden:

Because of efficiency gains and prevention of leakages, the overall tax burden on most commodities will come down, which will benefit consumers.

If GST manages to increase the revenue of government we can expect a lower rate on direct taxes.

Setback for GST: Need for e-permit to be flashed at inter-state borders

Setback for GST: Need for e-permit to be flashed at inter-state borders

The revolution the proposed goods and services tax (GST) promised might not be all that rosy because it would be hobbled by the need for an e-permit to be flashed at inter-state borders as the states insisted the old analogue practices continue.


The states seem to have gotten their way and will continue with the old ‘permit raj’ system, undermining one the biggest gains of GST. Though the paper permit may become an e-permit, those transporting goods within or outside states will still have to queue up at border check posts where their e-permits will be checked.

The centre resisted the move as its indirect tax administration moved away from the inspector raj era, but yielded to states’ insistence on inclusion of this clause in the final GST law in order to build consensus and get the reform bill rolling.

State tax authorities wanted this provision to keep a tab on quantum of supply of goods and pushed for its inclusion. Experts fear this would not help in cutting long queues of trucks at check posts as also breed corruption.

GST is from July 1 

The GST Council, the apex decision body for GST that has state finance ministers as members and union finance minister as chairman, will take up the GST Law at its next meeting in March.

“The central or a state government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding .`50,000 to carry with him such documents as may be prescribed in this behalf…,” says the draft model GST law.

“Where any vehicle referred to in sub-section (1) is intercepted by the proper officer at any place, he may require the person in charge of the said vehicle to produce such documents for verification and the said person shall be liable to produce the documents.”

States have such a provision in their value added tax laws where various forms are prescribed. This condition had dissuaded eCommerce players and they restricted delivery of goods exceeding.`5000 to a number of states.

Experts say any document checking at state borders does not go with the spirit of GST.

“The law provides for ample monitoring through the credit matching and compliance requirements under GST…. Any document checking at state borders is archaic and defeats the purpose of GST and the free market it purports to be,” said Bipin Sapra, partner, EY

“An e-permit system, if considered under GST, would significantly dilute the fundamental principles of GST relating to seamless movement of goods across states. It would adversely affect businesses who are preparing for GST on the understanding that trade barriers erected by states under the present VAT laws would be demolished under GST,” said M.S. Mani, Senior Director, Deloitte Haskins & Sells LLP

The centre was against the provision as it goes against the spirit of ease of doing business and encourages inspector raj.

“One of the stated promises of GST was to reduce associated documentation and related hassles. E-permits for movement of goods is therefore a retrograde step in the short term,” said Smita Roy, partner – Indirect Tax, BDO India, adding that it should be removed.

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