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GST : One Tax and Infinite Opportunities

May 19, 2017

On November 10 , 2009, First discussion paper came on Goods and Services Tax in India by Empowered Committee of State Finance Ministers under the Chairmanship of Mr. Asim Kumar Dasgupta, which envisaged for Comprehensive Indirect Tax Reforms in our country. Though Mr. P Chidambaram then Union Finance Minister mentioned about GST in his Budget Speech for 2007-08.(Constructive work came out later on November 10, 2009)

7 years, 5 months, 3 days took by Government of India for making Goods and Services Tax Act a REALITY. (from first discussion paper to President’s Assent)

Though it took 7+ years for GST to become Real from fanciful, but Thanks to Strong and determinant NDA Government, Hon’bl President gave assent on CGST Act, IGST Act, UTGST Act, GST (Compensation to the States) Act,and States are responsible to pass SGST Act in their respective assemblies, same need to be completed by States before July, 1, 2017. Telangana is the first state which has passed its SGCT.

GST Tax in India
What is Goods and Services Tax ? – GST is Destination based Indirect Tax system where Manufacturing place does not influence the Jurisdiction over taxing authority but the place of Consumption decides jurisdiction of taxing authority, which clears that where Goods or Services are destined to transfer, GST will be levied at that Destination, it means the GST Triggering Point is when the Goods and Services reaches its Destination, and not when Goods are manufactured or Service has been provided. GST has treated Goods and Services at par with equality, which was not the case in current Indirect Tax Regulation.

Taxable Event under GST: Triggering situation which attracts GST liability under Goods and Services Tax, 2017 is “Supply” of Goods or Supply as the case may be. Levy of GST is based on Destination of Goods and Service where those are meant to be supplied. i.e. ‘A’ supplies goods to ‘B’, then GST will be levied according to the jurisdiction of ‘B’, which is DESTINATION of Goods.

GST India Tax Rate

Intra-State Transaction: Where Supply of Goods or Services by Tax payer is within the state, then same shall under the purview of CGST and SGST, which means that on Intra-State Transaction CGST as well as SGST will be levied by Central government and State government respectively.

Inter-State Transaction: Where Supply of Goods or Services by Tax payer is in between two states, then IGST will be charged by Central Government on the Transaction. (GST Act is not applicable on the State of Jammu and Kashmir)

Import Transaction: Import Transaction will be treated as Inter-state supply and same shall be leviable with IGST (Integrated Goods and Service Tax)

Export Transaction: Export Transactions are now synonym with ‘Zero Rated Supply’. The term ‘Export’ is now replaced with Zero Rated Supply. Export of Goods or Services is not subject to any Levy

This article was first published on LinkedIn by Mangesh Panchavatikar

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