Top 5 Question About GST

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Question 1.  What is GST? How does it work?

Answer : GST is one indirect tax for your nation, which can make India one unified common market.

GST is an individual duty on the way to obtain goods and services, from the maker to the consumer. Credits of input taxes paid at each level will be accessible in the the next level of value addition, making GST essentially a duty only on value addition at each level. The ultimate consumer will thus bear only the GST billed by the last seller in the supply chain, with set-off benefits in any way the previous levels.

Question 2. What are the benefits of GST?

Answer : The advantages of GST can be summarized as under:

– For business and industry

  • Easy compliance: A powerful and extensive IT system would be the foundation of the Goods ans Service Tax program in India. Therefore, all taxes payer services such as registrations, returns, repayments, etc. It would be accessible to the taxpayers online, which would make compliance easy and transparent.
  • Uniformity of taxes rates and set ups: GST will ensure that indirect taxes rates. Its set ups are common across the country, therefore increasing certainty and simple doing business. In other words, Goods ans Service Tax would make conducting business in the country tax neutral. Becouse It regardless of the decision of place of doing business.
  • Removal of cascading: Something of smooth tax-credits throughout the value-chain, and across boundaries of State governments. It would ensure that there is little cascading of taxes. This might reduce hidden costs to do business.
  • Improved competitiveness: Decrease in transaction costs to do business would eventually lead to a better competitiveness for the trade and industry.
  • Gain to manufacturers and exporters: The subsuming of major Central and State taxes in GST, complete and extensive set-off of input goods and services and phasing out of Central Sales Taxes (CST). It would reduce the expense of locally produced goods and services. This can improve the competitiveness of Indian goods and services. It improve in the international market and give increase to Indian exports. The uniformity in taxes rates and methods across the country will also go quite a distance. Because of it is in minimizing the compliance cost.
– For Central and State Governments
  • Easy and simple to manage: Multiple indirect taxes at the Central and State levels are being changed by GST. Supported with a strong end-to-end IT system. Goods ans Service Tax would be simpler and simpler to administer than all the indirect taxes of the Centre and State levied up to now.
  • Better settings on leakage: GST will lead to better tax conformity due to a strong IT infrastructure. Because of the seamless copy of input taxes credit from one stage to some other in the chain of value addition. There is an in-built system in the design of Goods and Service Tax that could incentivize tax conformity by traders.
  • Higher income efficiency: Goods ans Service Tax is likely to decrease the expense of collection of taxes revenues of the Government, and can therefore, lead to raised revenue efficiency.

– For the buyer

  • Single and transparent taxes proportionate to the value of goods and services. Because of multiple indirect taxes being levied by the Centre and State. It is with imperfect or no input tax credits offered by progressive levels of value addition. The cost of most goods and services in the country today are loaded with many hidden taxes. Under Goods ans Service Tax system, there would be only one tax from the manufacturer to the buyer, resulting in transparency of taxes paid to the ultimate consumer.
  • Relief in overall taxes burden: Due to efficiency increases and protection of leakages, the entire tax burden of all commodities should come down, that may benefit consumers.

Question 3.  What is State GST and Central GST?

Answer: For transactions within a State, there will be two components of GST – Central GST (CGST) and State GST (SGST). – levied on the value of goods and services. Both the Centre and the States will simultaneously levy GST across the value chain.

In the case of inter-State transactions, the Centre would levy and collect the Integrated Goods and Services Tax (IGST). The IGST would be roughly equal to CGST plus SGST.

Question 4. How will GST affect the common man?

(Source: The Hindu)

Answer: The impact of the Goods ans Service Tax on the prices of goods and services will largely depend on the item in question. It will also depend upon the respective State governments and their intervention with respect to controlling prices of essential commodities. Milk, for example, which is likely to see a spike in prices after Goods ans Service Tax is implemented, can still be sold at cheaper rates. if the State government offers a subsidy on it.

Question 5. How will GST affect tax deductions of a salaried person?

Answer: The Goods ans Service Tax is an indirect tax collected from customers who buy manufactured goods or services. So whether you are earning a salary or not, as long as you buy something, you’ll be paying tax.

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