GST(Goods and Sales Tax) is going to be a very significant and far-reaching tax reform. It is going to subsume all the indirect taxes have just one rate throughout the entire nation. GST is going to be levied nationally in India on manufacturing, sale, and consumption of goods and services. From 1st July 2017 onwards only one indirect tax is going to be levied by the Government on the trade and industry.
Direct taxes like Income Tax, Corporate Tax, and Capital gain tax will not be affected by this new form of tax GST.
GST would apply to all goods and services barring a few.
The GST comprises of three forms as under-
1) Central GST- The one which will be levied by the Centre
2) State GST- The one which will be levied by the State
3) Integrated GST- This will be levied by the Centre on Interstate supply of Good and Services
It is expected that this form of tax will cut down the prices of some goods and services and on the other hand, some of the services and goods are going to be expensive.
How is GST going to affect a common man-
In this unification process of taxation, the GDP is expected to increase by 2%
Below are the list of some of the goods and services that are going to be cheaper-
1) Readymade garments would be cheaper
2) Purchasing car would be cheaper
3) LEDs is going to be cheaper
Below are the list of some of the goods and services that are going to be expensive-
1) Jewellery are going to be expensive
2) Phone bills would be expensive
3) Eating out will be expensive
4) Buying phones would be expensive
5) Buying electronics, shoes, and bags online is going to become expensive
GST is going to impact almost all industries and businesses.
Below are the steps a corporate needs to take to implement hassle free GST-
1) Enroll your company if not done yet and get the provisional ID which will be your GST Identification Number (GSTIN)
2) The ERP has to be refurbished according to the coming GST. ERP is nothing but an organizational system to facilitate error free transaction.
3) The backend system has to be updated
4) The network of vendors and suppliers should be prepared for the new tax system GST
5) Train your staff for the implementation of GST
6) Companies requirement as according to GST should be analyzed to figure out the loopholes before GST implementation
7) The tax structure is going to change after GST implementation as there is provision for filing a monthly return in GST and separate provision is there for the annual return. So companies should be ready for new compliances.
No doubt GST is going to be a big leap in Indian taxation system.
GST is going to be far more simple than the current tax system and is going to make the movement of goods cheaper and smooth.