GST Ready India

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GST FAQ: Answers to all your questions about India's biggest tax reform

May 31, 2017

How India’s GST in its current avatar deviates from global practices

A hundred-and-forty countries are already familiar with the goods and services tax (GST) or value-added tax. But in its current form, India’s GST is complicated and very different from the global variety. A multi-tier tax rate structure and complex rules make execution of this mammoth indirect tax a herculean task.

Unlike other nations, goods and services in India will be charged at different rates depending on the categories they belong to. Tax rates for 1,211 items have been finalized, though rates on six crucial and controversial items including gold and beedi are yet to be decided. Click to read more

GST: Amusement park industry urges lowering of tax rate

With the imposition of a mammoth 28 per cent tax rate on amusement-theme parks under the forthcoming Goods and Services Tax (GST) regime, there exists an underlying threat to its survival as it will not only hamper the industry but would also pose to be a deterrent to new entrants in this industry.

The amusement park industry, which is still in its budding phase in the country, is a highly capital-intensive industry and requires significant investment both Capex on land and rides to the tune of Rs 700 crores for mega parks and Rs 100 crores for mid-sized parks and also the Operational Expenditure (Opex). Click to read more

GST spells a hard road ahead for banks

With the Goods and Services Tax (GST) implementation around the corner, a question everyone wants answered is whether banks are truly ready for it. Even startups availing banking services will have to pay more tax for every transaction conducted with their bank.

Tax rates for banking services delivered will now increase from 15 percent to 18 percent, a move that is expected to make bankers’ lives harder. Now the point of contention is whether input tax credit will continue, which is given when proper records were maintained to track taxable and exempt banking services. Click to read more

Scope for rationalisation of GST rates: Hasmukh Adhia

Revenue Secretary Hasmukh Adhia said there is scope for rationalisation of tax rates fixed for GST regime and the intention of the government is to increase the revenue without hiking tax rates.

“One thing we would agree is that there is a scope for rationalisation of tax rates on various goods and services,” he said at a townhall meeting with industry here.

The GST Council, headed by Union Finance Minister Arun Jaitley and comprising his state counterparts, had earlier this month fitted over 1200 goods and 500 services in the tax slab of 5, 12, 18 and 28 per cent. Click to read more

GST no panacea

The Goods and Services Tax (GST) is being flaunted as the single-biggest economic reform since the economic liberalisation of 1991. Even critics of the tax, who complain about its complex four-slab rate structure, agree that it is a step in the right direction. The primary reason is that it does away with the present system of multiple Central and State taxes, replacing it with a much simpler tax system.

Another supposed benefit of GST is that it is a tax on consumption, which replaces the current web of ‘cascading’ taxes in the production chain that increases prices and distorts production. In the process, it is said, the new tax system does away with the barriers to free trade within and between States, effectively turning India into a single free market for goods and services. Click to read more

Go one better: GST’s ambit should cover real estate and alcohol to fight black money

The progress of legislative activity to roll out Goods and Services Tax (GST) has been hailed – and rightly so – as an important step in India’s economic transformation. It was helped by the willingness of all political parties to prioritise long-term good over expediency. Unfortunately, that is not the entire story. GST would have been better if real estate and alcohol had been included in its ambit. GST represents not just an economic reform, but also a step that will lead to formalisation of Indian economy. This is a pre-requisite to win the battle against black money. Click to read more

3.5 billion invoices every month! All about the technology that GST will bank on from July

The success of India’s biggest tax reform hinges on a trouble-free show from the technology that will run it. When GST finally comes to play in July, there will be much pressure on the GSTN or the goods and services tax network, the IT backbone of the landmark tax reform, that promises to make India a uniform tax country.

The task won’t be easy, considering the fact that GSTN, according to a Bloomberg report, will be processing as many as 3.5 billion invoices each month from July, with 8 million direct taxpayers requiring to file up to 37 tax returns in a year. Click to read more

GST: 5% for gold, 12-18% for biscuits; no exemption for handicrafts likely

The Centre is likely to propose two rates for biscuits, depending on prices, at the goods and services tax (GST) Council meeting on Saturday. It would also make a case to tax gold at 5 per cent.

For biscuits priced at Rs 100 a kg or more, the Centre might propose a GST rate of 18 per cent. Those priced less could be slotted in the 12 per cent slab.

At present, biscuits in the second category are not taxed by the Centre, but have a 4.5-14.5 per cent value-added tax, depending on the state. Click to read more

GST impact: Insurance premium, bank charges to increase

The impending implementation of GST would undoubtedly impact one’s personal finances especially when it comes to financial services, albeit marginally. From the present rate of 15 percent, the GST on banking, insurance and investments such as real estate, mutual funds will see a hike of 3 percent as the GST will now be 18 percent on them.

Let’s see how each of them gets impacted.

GST and Insurance

Primarily, there are three major kinds of life insurance products – Term insurance plans, Ulips and Endowments (including money back). The applicability of service tax (in the current format) on their premium is not similar in all three of them. Click to read more

Hotels in TN down shutters over GST

Most of the hotels in Tamil Nadu and Puducherry remained shut today in protest against high taxes under the proposed Goods and Services Tax (GST) regime.

Around 1.5 lakh restaurants, bakeries and tea stalls remained shut in the state, 80,000 of them in Chennai.

Plea for lower rates

R Srinivasan, Secretary, Tamil Nadu Hotels Association, said hoteliers in Tamil Nadu and Puducherry want the GST for restaurants be brought down to 5 per cent bracket for both air-conditioned and non-AC restaurants. Click to read more

GST FAQ: Answers to all your questions about India’s biggest tax reform

1) What is Goods and Services Tax (GST)?

It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as set off. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer.

2) What exactly is the concept of destination based tax on consumption?

The tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply. Click to read more

GST among India’s most historic business reforms: PM Narendra Modi

PM Narendra Modi on Tuesday pitched GST as among the most historic business reforms in India and urged German investors to make use of one of the most liberal FDI regimes in the world.

While addressing the Indo-German business forum in Berlin, the PM said: “We are on the path of making India a global manufacturing hub… India is already the sixth largest manufacturing nation in the world… India remains a bright spot in the subdued economic landscape across the world.” Click to read more

GST Countdown: 43% Rate Will Drive Hybrid Technology Out Of India, Maruti Says

Electric vehicles at 12 percent, luxury vehicles and hybrids at 43 percent and passenger cars at 28 percent with three categories of cess – that’s the rate structure for automakers under the Goods and Services Tax regime now little more a month away. In BloombergQuint’s special series, GST Countdown, we spoke with RC Bhargava, chairman of Maruti Suzuki on the company’s GST preparedness. Click to read more

States may gain Rs 350-450 billion in revenue post GST: Report

States can look at a higher revenue of Rs 350-450 billion after GST implementation in mid-2017, says a Standard Chartered report.

According to Standard Chartered Bank’s report titled India – States’ Finances: The other half of the story post GST implementation states can look at a total gain of Rs 350-450 billion, roughly around 0.2-0.3 per cent of GDP.

The study that assessed underlying dynamics of various states’ finances over a decade said if they can keep their fiscal deficits within the budgeted target.. Click to read more

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