Importance of GST in Business

What is GST? Goods and Services Tax is also known as GST is a single indirect tax which will replace the following taxes with a single and much-reduced tax rate: • Central Excise Duty • Additional Excise Duty • Service Tax • Surcharge, Cess • VAT/ Sales Tax • Entertainment Tax • Luxury tax • Additional customs duty • Special Additional duty of customs • Taxes on lottery and betting • Entry tax • State ceases and surcharge What are the benefits of GST For the Business • Reduced Tax rates • Easier compliance For the Consumer • Lower prices Difference between VAT and GST VAT or Value added tax will be replaced by GST (State GST) and though very little clarity is present now, this will most probably be managed by the state. Unlike the current situation, GST will have a single and much-reduced tax rate, prompting more businesses to become transparent. The current VAT authority will continue to manage GST Difference between Service Tax and GST Like VAT, Service Tax will also be replaced by GST but might be managed by the Center. The dual tax points currently pose a difficulty in implementing the tax in India. It is to be seen how the empowered committee of the state finance ministers will come up with a solution for having a single tax rate. The current central administration will continue to manage GST How to be prepared for GST? GST will call for more transparency and increased enforcement of tax revenues. It would be important to track the input taxes and be ready for compliance. Here are a heads up of what you can think of doing: • If you are into manual billing systems, move to a computerised billing system • Automate the system of adjusting input credits • Get a real-time view of your tax liabilities across your business locations