01 July 2017

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RIP Indirect Taxes Welcome GST Tax system

RIP Indirect Taxes Welcome GST Tax system
Taxes in India are levied by the Central Government and the state governments.
Few taxes are also levied by the local authorities.
Example – BMC

Indian citizens pay normally two types of taxes Direct and Indirect Taxes.

Direct tax is linked with the income of the citizen. As per the Income Tax (IT) Act, 1961 every assessee whose total income exceeds the maximum exempt limit is liable to pay direct tax that is income tax.

100% Indian  citizens pay tax to government of India because of Indirect Taxes. when a poor homeless Indian citizen buys a Biscuit, He pays tax to governemnt because of Indirect Tax.

Indirect taxes are not directly paid by the assessee to the government. These are levied on goods and services and collected by who sell goods or offer services.

Below are the examples of Indirect Taxes –

1- Value Added Tax (VAT) - This is levied by the state government
2- Customs duty - Imported goods brought into the country are charged with customs duty which is levied by the Central Government.
3- Octroi - Goods that move from one state to another are liable to octroi duty. This tax is levied by the respective state governments.
4- Excise duty - All goods produced domestically are charged with excise duty.
this is paid by the manufacturers.
5- Service Tax

Now its July 1, 2017 the start of GST Tax system in India.

Now it’s time to say bye-bye to various taxes levied by state or central taxes.

GST is a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India and will subsume many indirect taxes levied by the Central and State Governments. GST will be implemented through Central GST (CGST), Integrated GST (IGST) and State GST (SGST).

In Short what GST will do – One India One Product One Tax that is One Price.
It’s wrong when we say one country one tax.
Its only correct when we say One country, One Product One Tax.

The IT framework and services for implementation of the new taxation system will be managed by "Goods and Services Tax Network (GSTN)", a non-government company set up by the Centre and states

Former Congress Prime Minister of India Manmohan Singh started the process of reforming Indirect Taxes, He took the First step towards GST that is Goods and Service Tax (GST).
The ex-Finance Minister of India, Chidambaram in his Budget speech has indicated the government's intent of merging all taxes like Service Tax, Excise and VAT into a common Goods and Service Tax by the year 2011.
As it is the duty of Opposition party to oppose everything suggested by ruling government, BJP never allowed Congress PM Manmohan Singh to implement GST.
Ex.PM Singh government was a weak government it was the coalition not majority government.

Now PM Narendra Modi and BJP enjoys the full majority in lower house  and no one can stop them Thus BJP government which always said no to GST has now implemented the Goods and Services Tax in India.

BJP always knew GST was good for India but as it was suggested by the Congress it kept opposing GST and now successfully today BJP can say they brought the GST in India.

RIP Indirect Taxes system of India

Reality views by sm –

Saturday, July 1, 2017

Tags – RIP Tax System India GST