WHAT IS GST TAX? MEANING OF GST IN EASY FORM
GST TAX stands for “Goods and Service Tax”. “Goods and Services Tax “system is one of the most ambitious and biggest tax reform brought forward by the Government of India in recent times. New GST Tax system aims to streamline the tax flow throughout the country. The Government is positive that it will bring transparency in the tax structure. This new “Service Tax” attempts to abolish complex tax structure and place a simple and straight forward duty system. Goods and Service Taxation will bring smaller business from unorganized sector in to the tax system. Many businesses until now were not properly integrated in to the taxation structure.
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This new tariff is set to bring “One Country, One Tax” system in place. Threshold for exemption of tax is Rs. 20 lacs and for Rs. 10 lac for special category states. Main feature of this Bill: It applies, “Tax on SUPPLY OF GOODS OR SERVICE rather than manufacture / production of goods, provision of services or sale of goods”. Goods & Service Taxation in India is an indirect tax. Both the Central government and state government will administrate the taxation system as this is a dual GST model.
WHY “INDIA GST” SYSTEM CAME INTO IMPLEMENTATION
India is not known world over for its taxation system. Indian Tax system is very complex and not many understand it properly. Even businessmen who are into business from long times have to take the advice of Chartered accountants regarding their tax queries. The idea of “India GST” duty system was developed to smoothen the service tax process in India. Another reason “India GST” become necessary was because a significantly large number of businesses in India were not properly filling their service taxes and the Country faced huge financial losses due to such loop holed tax system. India GST comes under Central Board of Excise and customs which falls under Department of Revenue under the Ministry of Finance, Government of India.
BENEFITS OF GOODS & SERVICES TAX
The Government is proposing following benefits of Goods & Services tariff to Traders. Simpler Tax Regime, Reduction in variety of Tariffs, Easy reporting, it will develop a common national market. The Benefits of GST to consumers and buyers include Reduction in prices (as it avoids cascading tax system), Uniform price system across country (previously different states had different taxes on same products which resulted in multiple price of same product across each state). The government also hopes that it will create new employment opportunities.
WHEN WILL GST BECOME EFFECTIVE?
Many business house and chambers were pushing the government to implement it from September 2017, but the government has declined their proposal and now the GST will be implemented from 1st July 2017. There will be a special midnight assembly in the Central Hall of the Indian Parliament to honour the occasion. 1st July 2017 will be observed as “GST Day”.
GST RATES
It is very important to know the GST Rates on different services and goods. According to the new system, it is divided into two parts, rates of Goods and Rates of Services. The rate schedule for goods are decided from 5% to 28%. The rate of services also varies from 5% to 28%. Certain goods and services that are very important in daily life are exempted from the tax slab and they are placed under 0% tax rates. There are many luxury items that attract extra CESS after 28% Tax. There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold. Some items that fall under 0% rates are daily consumption items like fruits, vegetables, eggs, chicken, fish, fresh meat, curd, butter milk, milk, natural honey & curd etc.
GST IN INDIA
GST in India is a new concept. People in India are still learning all the aspects of this new system. It is expected that “Goods & Services Taxation” in India will change the face of Indian duty system. Once This new bill India is completely implemented, we will see its full benefits. The industry experts expect that in the beginning there will be increase in inflation but in long run it will be most beneficial in the interest of country.
PRE-GST SALE OFFER & CLEARANCE SALE
Before the implementation of GST Law many e-commerce websites including winsant.com have introduced “Pre-GST Sale” with reduced prices. During this Pre-GST sale special discount was offered on entire product range. This Pre-GST clearance sale is a great idea to provide the best discounted offer to buyers and simultaneously increase the awareness of GST in consumers.
EFFECT OF GST ON TEXTILE INDUSTRY
While most experts say that the rates of textile produces will remain more or less same, Textile business owners claim that it will increase the rates significantly, as new taxes are levied on “Job Workers” which was previously not there.
GST AND MOBILES
Mobile phone is one electronic accessory that has become a necessity. Most of the people nowadays cannot live without their mobile phones so it necessary to know what effects will Goods & Service Tax System bring on cell phones and cell phone bills. It is believed that your mobile billing will become costly from previous months as the Goods and Service Tax Council has put Telecom sector under 18% Tax slab whereas previously it was 15%. So there is 3% increase in mobile phone bill. The new rates on Mobile phones are decided at 12%. This means that newer phone models will become costly, but smartphone manufactures have informed that they will not increase the prices of existing models and bear the cost.
GOLD RATES AND GOODS & SERVICE TAX
Indian’s love for gold is known all over the world. Gold is the favorite precious metal of Indians. Below is the explanation of new GST-Bill on gold rates.According to new Goods & Services Tax rates gold will become cheaper in Kerala and it will be costlier across rest of India. The duties on gold at present is around 2% including of 1% of excise duty and 1% of VAT in most States, in Kerala it is 5%. As a result there will be slight increase in gold price for rest of India . At the same time new rate of 3% will make keralites happy (A reduction of 2% from previous 5%).
EFFECTS OF GST ON ELECTRONICS INDUSTRY
What effect will the new bill have if you are planning to buy electronics items? Well you will have to shed some extra money post the Bill 2017 to buy electronic items. The new prices are expected to be 4% higher than current prices. Earlier the cumulative Tax on such items ranged from 23% to 28%,but now it is fixed to 28%. Items like TV, Fridge, AC, Washing machine etc. will get costly.
OFFICIAL WEBSITE
You can search for your Goods and Service Tax related queries here on the official website https://www.gst.gov.in/
GST LOGIN & REGISTRATION
There is a step by step guide to registration and login on the official Government website https://reg.gst.gov.in/registration/ there is an easy illustrated guide that anyone can follow.
GST NUMBER UPDATE FOR SELLERS
As per the new bill the sellers are required to update their GST number. We have created YouTube video which can be found here; in it we have explained how you can update your details on winsant.com
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