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Monday, February 22, 2016

Why is GST Important For India

gst in india
GST is expected to be a critical reform in spurring growth in the economy. When introduced, GST will not only make the tax system simpler, but will also help in increased compliance, boost tax revenues, reduce the tax outflow in the hands of the consumers and make exports competitive. It is hoped that the new Government will set forth a roadmap of the GST implementation in the upcoming Budget. The GST or the Goods and Service Tax is a long pending indirect tax reform which India has been waiting for, and which is hoped to iron out the wrinkles in the existing tax system. This comprehensive tax policy is expected to be one of the most important reforms in contributing to the India growth story. To begin with, the GST is a value added tax to be levied on both goods and services (except for a list of exempted goods and services), at both the centre and state level (Central GST and State GST respectively). This is a single tax which will be levied on the product or service which is sold. In other words, multiple taxes like CENVAT, central sales tax, state sales tax, octroi, etc will not exist and will be replaced by GST. This comprehensive tax covers all stages from manufacture to sale. The tax will be levied only on the value added at each stage of the life cycle. The GST, as mentioned above is an indirect tax and will be borne by the customer. There will be a standard rate of GST across various goods and services, which could broadly be in line with international rates. World over, GST has been implemented in over 150 countries. You may wonder why this tax reform is so important for the country and how it will help the common man. Here’s how: 

Simpler tax structure: As multiple taxes on a product or service are eliminated and a single tax comes into place, the tax structure is expected to be much simpler and easier to understand. Paperwork will become simpler and there will be a reduction in accounting complexities for businesses. A simple taxation regime can make the manufacturing sector more competitive and save both money and time. Experts opine that the implementation of GST would push up GDP by 1%-2%.

Increased tax revenues: A simpler tax structure can bring about greater compliance, thus increasing the number of tax payers and in turn tax revenues for the Government. The current state of the Indian economy demands fiscal consolidation and reduction in fiscal deficit. A recent report by CRISIL states that GST is the country’s best bet to achieve fiscal consolidation. As there is not much scope to reduce Government expenditure, increasing tax revenues is the best alternative to improve the fiscal health. 

Competitive pricing: GST will eliminate all other forms of indirect taxing. This will effectively mean that the tax paid by the final consumer will come down in most cases. Lower prices will help in boosting consumption, which is again beneficial to companies. The biggest positive of GST is that goods and services will be taxed on a common basis. 

Boost to exports: When the cost of production falls in the domestic market, Indian goods and services will be more price-competitive in foreign markets. This can bode well for exporters, who compete with manufacturers abroad facing a lower cost structure. The exact rate of tax levied under GST will obviously be clear only when the final announcement will be made. Irrespective of the tax rate, it is logical and apparent from examples of other countries, that GST is a critical reform needed for the country. However, many state Governments are not in favour of this move, as it will result in a fall in their tax revenues. Arriving at a suitable formula to solve this problem, making constitutional changes and considering all the dynamics in the economy has resulted in a considerable delay in GST’s implementation. The CRISIL report states that at best, only a partial rollout of GST will be possible by the Government in the next financial year. The majority win by the ruling party in the recent elections has given a renewed hope that such important structural reforms will be brought into place without much delay. It is hoped fervently by the industry that Budget 2015 will spell out some solid measures and give a roadmap to the implementation of the GST. 

क्या है GST
वस्तु और सेवा कर (जीएसटी) एक अप्रत्यक्ष कर है। जीएसटी के तहत वस्तुओं और सेवाओं पर एक समान कर लगाया जाता है। जहां जीएसटी लागू नहीं है, वहां वस्तुओं और सेवाओं पर अलग-अलग टैक्स लगाए जाते हैं। सरकार अगर इस बिल को 2016 से लागू कर देती तो हर सामान और हर सेवा पर सिर्फ एक टैक्स लगेगा यानी वैट, एक्साइज और सर्विस टैक्स की जगह एक ही टैक्स लगेगा। संक्षिप्त में कहे तो भारत में 20 तरह के टैक्स लगते हैं और अब एक टैक्स इन सबकी जगह ले लेगा, और वो होगा जीएसटी।

इससे पूरे देश में वस्तुओं और सेवाओं की कीमतें लगभग एक हो जाएंगी। उत्पादन लागत घटेगी, जिससे उपभोक्ताओं के लिए सामान सस्ता होगा।

जीएसटी के फायदे
● इससे पूरे देश में किसी भी सामान को खरीदने के लिए एक ही टैक्स चुकाना होगा। यानी पूरे देश में किसी भी सामान की कीमत एक ही रहेगी।
● इससे कर की वसूली करते समय कर विभाग के अधिकारियों द्वारा कर में हेराफेरी की संभावना भी कम हो जाएगी।
● इसके लागू होने के बाद राज्यों को मिलने वाला वैट, मनोरंजन कर, लग्जरी टैक्स, लॉटरी टैक्स, एंट्री टैक्स आदि भी खत्म हो जाएंगे। जिससे अभी जिस सामान के लिए 30-35 प्रतिशत टैक्स के रूप में चुकाना पड़ता है वो भी घटकर 20-25 प्रतिशत पर आ जायेगा।
● भारत की ग्रोथ रेट में भी एक से डेढ़ फीसदी की बढ़ोतरी होगी।
● केंद्रीय बिक्री कर (सीएसटी) खत्म हो जाएगा। प्रवेश शुल्क और चुंगी भी खत्म हो जाएगी। अलग-अलग टैक्स की बजाय एक टैक्स लगने की वजह से चीजों के दाम घटेंगे और आम उपभोक्ताओं को फायदा होगा।

जीएसटी के किसको होगा नुकसान
जीएसटी लागू होने से राज्यों को डर है कि इससे उन्हें नुकसान होगा क्योंकि इसके बाद वे कई तरह के टैक्स नहीं वसूले पाएंगे जिससे उनका राजस्व कम हो जाएगा। इसे ध्यान में रखते हुए केंद्र ने राज्यों को राहत देते हुए मंजूरी दे दी है कि वे इन वस्तुओं पर शुरुआती सालों में टैक्स लेते रहें। साथ ही, राज्यों का जो भी नुकसान होगा, केंद्र उसकी भरपाई पांच साल तक करेगा।

Industrial Accounting & Taxation Training Institute 
15,Bhande Plot Umred Road Nagpur  mob. 9373104022

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