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Gst in india

  1. GST In India Prepared by:- Shubham Sharma
  2. Topics •Indian Economy- An overview •Taxonomy of Indian taxation •Present – tax system suffer from •Need for GST •What is GST and its key features •GST- Global perspective •More About GST •GST - Issues yet to be decided
  3. Indian Economy – An overview • India’s economy is the 11th largest economy in the world and the third largest by purchasing power parity (PPP) • G-20 major economies and a member of BRICS • World is presently facing recession-II but Indian economy is still better than comparable economies. • Agriculture, services and industry are the major sector of India an economy. Contribution of different sectors in March, 2012 was : • Agriculture 19% • Services 59% • Industry 22%
  4. GDP CO MPO SITIO N IN MARCH, 2012 Agriculture 19% Industry 22% Service Sector 59%
  5. Growth in Tax GDP Ratio – Slow but Steady Years Tax GDP ratio 2003-04 9.2% 2007-08 11.9% 2009-10 9.7% 2010-11 10.3% 2011-12 10.1%
  6. Tax Structure in India • Direct Tax : e.g.: Income Tax, Corporate Tax, Wealth Tax • Indirect Tax : e.g.: Excise duty, custom duty, Service Tax, VAT.
  7. Tax Structure Direct Tax Income Tax Wealth Tax Indirect Tax Central Tax Excise Service Tax Custome State Tax VAT Entry Tax, luxury tax, Lottery Tax, etc.
  8. Short comings in current Tax System  Tax Cascading (Tax on Tax)  Complexity  Taxation at Manufacturing Level  Exclusion of Services  Tax Evasion  Corruption
  9. Goods and Service Tax (GST) • The Goods and Service Tax (GST) is a Value Added Tax (VAT) to be implemented in India, from April 2016. • GST is comprehensive tax mechanism where in all major indirect taxes are clubbed into one, whether they are levied on services(service tax) or goods(excise and vat). • Government had promised that GST will reduce the compliance burdens at present. • One of the aims of introducing GST is to reduce the cascading effects of taxes which is the primary focus of VAT but vat system is not comprehensive enough to do so.
  10. GST – Why ?  Reduce barriers of inter-state trade & create a Common National Market  Redress the imbalance in taxation between manufacturing & the service sector  Private Investment choices should be influenced by economic considerations and not by tax rates or tax exemptions  Reduce multiplicity of taxes and ensure transparency  Reduce the incidence of taxation by expanding the taxable base  Mitigation of cascading / double taxation 11
  11. Tax Structure Direct Tax Income Tax Wealth Tax Indirect Tax = GST (Except customs) Intra- state CGST (Central) SGST (State) Inter State IGST (Central)
  12. •Central Excise •Additional duties of Custom (CVD) •Service Tax •Surcharges and all cesses CGST •VAT/sales tax •Entertainment Tax •Luxury Tax •Lottery Tax •Entry Tax •Purchase Tax •Stamp Duty •Goods and passenger Tax •Tax on vehicle •Electricity, banking, Real state SGST • CST IGST Subsuming of Existing Taxes
  13. • Major flaw of this model is Local Dealers have to pay CGST in addition to SGST. • In Addition to this, CGST mainly represents the Excise/service tax and SGST mainly represents the VAT portion but, because of ‘No differentiation between Goods and Services’ service supply within the state would attract SGST as GST is levied at each stage in the supply chain and Assessee have to Pay CGST as well SGST. Flaws of GST Model Download Source-
  14. Benefits of GST Transparent Tax System Uniform Tax system Across India Reduce Tax Evasion Export will be more competitive
  15. GST Global Scenario More than 140 countries have already introduced GST/National VAT. France was the first country to introduce GST system in 1954. Typically it is a single rate system but two/three rate systems are also prevalent. Canada and Brazil alone have a dual VAT. Standard GST rate in most countries ranges between 15-20%.
  16. India's GST structure is complex, says IMF • Report says the proposed GST structure will require the centre to coordinate with 30 states, which is an administrative challenge. • Even as the international monetary fund (imf) says the proposed goods and services tax (gst) will improve tax compliance and enhance economic growth by 1-1.5 per cent over time, it finds the structure of the indirect tax regime in india complex.
  17. Summary • We all will pay GST on every product or service we buy/ consume • All indirect taxes levied by the states and the centre will be merged into one GST, we would exactly know how much tax we pay which at present is difficult to understand. • The sellers or service providers collect the tax from their customer. • Before depositing the same to the exchequer, they deduct the tax they have already paid. • The success of GST would rest upon efficiency, equity and Simplicity.
  18. THANK YOU You were good audience