Movement of goods or provision of services from one person to another person or from one place to another place, (that is, supply) entails Tax (like, Value Added tax or VAT).
GST is expected to be a destination based consumption tax, unlike the present origin based taxation.
Broadly it means that Tax is levied on, payable on consumption of goods and services and borne by consumer. In a chain of supply, intermediaries (business entities) involved would only collect tax, take credit of tax paid on purchases and pass on tax to the next in chain and ultimately to consumer, like VAT.
GST will be a Dual Tax (Centre + State) regime. Intrastate supply of goods or services will be subjected to State GST and Central GST.
On interstate supply of goods and services, Integrated Goods and Service Tax (IGST) would be payable (to be levied by Centre).
Likely rates of GST are being contemplated and worked out at relevant Committee levels. Initial aim seems to work on RNR (Revenue Neutral Rate) or maximum rate of GST.
GST Rate structure is likely to span out as under:
A dealer and/or service provider will be permitted to set-off Central GST ('CGST') payable against available CGST credit and State GST ('SGST') payable against available SGST credit. In case of IGST, a dealer and / or service provider will be permitted to offset IGST, CGST and SGST on purchases against IGST payable against inter-state transactions of goods and services.
|Central Taxes||State Taxes|
|Central Excise Duty||VAT/ Sales Tax|
|Additional Excise Duties||Entertainment Tax (unless it is levied by the local bodies)|
|Excise Duty levied under the Medicinal and Toiletries Preparation Act||Luxury tax|
|Service Tax||Taxes on lottery, betting & gambling|
|Additional Customs Duty, commonly known as Countervailing Duty (CVD)||State cesses and Surcharges in so far as they relate to supply of Goods & Services, and|
|Special Additional Duty of Customs-4% (SAD)||Entry tax not in lieu of Octroi|
|Surcharges and Cesses on above Taxes|
Alcohol for human consumption
We will deal with each of the aspects touching the levy from time to time for better understanding from a business angle.
In that, the order could be: Provisions of aspects touching levy; Business effects of each aspect or collectively; Practical illustrative situations; Impact of levy on Business; Procedures and it's effects and so on.