Difference between present and post GST scenario

One may clearly ask that why are we going to need GST? Is there any kind of problems associated with the present form of tax we are paying? What are the exact differences that VAT & other indirect taxes have with GST? Let us have a closer look at the differences at the present & going to be implemented GST tax –

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There are various types of taxes that we pay to the state as well as the central government. 

• Taxes like custom duties, CSTs are generally paid to the centre while taxes such as State Vat, Sales tax deducted at source, WCT, Luxury tax, Entertainment tax, Tax on Lottery, (wind fall gains) are paid to the state. This is the present scenario of Indian economy, if GST is implemented then all these indirect taxes will be subsumed under one head i.e. GST itself

• Presently taxes are levied by the government on manufacture or on sale of the products but with GST coming into being tax will be paid at the final level of consumption of the product supplied by the last supplier.

• A kind of decentralized registration was till date done under the central & state authorities; many were not registered even but with GST into force, small scale traders & service providers who are dealing with inter state sellable goods must get themselves registered based on PAN of entity, & pay GST & also file the GST returns irrespective of whatever they earn at the end

• Presently there is no different power bestowed to the central as well as the state government on the subject of tax but once GST is implemented an amended law made by the constitution will give both the governments the power to make laws on GST in their own respective ways.

•  As of now the burden of taxes on common people is unconditionally high. Once you’ve GST into force then the common people will be relieved much from this burden as no more they have to pay different taxes instead would end up paying one uniform tax i.e. GST.

• Presently 18% is being charged for services that are provided & in this if GST comes into action then the cost of services will be calculated separately which will make the cost of services to shoot up making services such as telecom, airlines & banking much expensive.

•  Location biasness is one of the major problems that the businessmen are facing at the present economic scenario. Once GST is being implemented the biasness will be eradicated as then the businessmen do not have to pay any kind of extra tax for change of location. Business men can now invest on their unit’s whole heartedly.

• Once GST will be implemented the purchase tax which is now the major source of revenue for many states on alcoholic or tobacco products will no longer be there which can cause a setback in the revenue collection.

Check Out the New GST RATE CHART of 2017 Here