A COMPARATIVE VIEW ON GOODS AND SERVICES TAX

GST tax consultant is based on the recommendations of the First Discussion Paper made by the Empowered committee of states finance ministers (hereafter referred as EC) and the Report of the Task Force on GST comprised by the Thirteenth Finance commission.

Prior to going on discussion we ought to establish GST and the Objective behind it.

What’s GST?

GST is a tax on products and services with comprehensive and continuous chain of set-off advantages from the Producer’s point and Service supplier’s point upto the retailer level. It is fundamentally a tax only on value addition at every stage and a provider at each stage is permitted to set-off through a tax credit mechanism. Under GST structure, all different phases of production and distribution can be interpreted as a mere taxation pass and the taxation essentially sticks final consumption within the taxing jurisdiction.

Objective behind GST

A) The incidence of taxation simply drops on national consumption. B ) The efficiency and equity of the system is optimized. C) There should be no export of taxation across taxing jurisdictions. D) The Indian marketplace ought to be incorporated into a single common market. E) It enhances the reason for co-operative federalism.

Our comparative discussion is going to be based only on significant points assembling overall GST.

GST MODEL

A dual structure has been recommended from the EC. The two elements are: Central GST (CGST) to be levied by the center and state GST (SGST) by the nations. The Task Force has also recommended for its dual lie imposed simultaneously by the middle and the states, but to market co-operative federalism. Both the CGST and SGST ought to be levied on a shared and indistinguishable base.

Both have indicated for consumption type GST, which is, there should not be a differentiation between raw materials and capital goods in permitting input tax credit. The tax base should comprehensively extend over all goods and services upto final consumption point.

Also both are of the opinion that the GST ought to be ordered on the destination principle. According to Task Force that this is going to result in the shift in production to consumption whereby imports will probably be liable to both CGST and SGST and exports should be relieved of the burden of goods and services tax by no evaluation. Consequently, revenues will accrue to the state where the consumption takes place or is required to take place.

The Task Force on GST said the computation of CGST and SGST liability should be dependent on the Invoice charge technique. Because of this, all different phases of manufacturing and distribution can be interpreted as a mere tax pass-through and the tax will efficiently’adhere’ on final consumption within the taxing jurisdiction. This will facilitate elimination of the cascading impact at different phases of production and supply.