Gst: genesis , journey , and the road Ahead".

why GST implemented in India
why GST still far way in India
advantages & disadvantages of GST
GST in India and other countries
challenges of GST
Suggestion for GST

1. GST: “Genesis , Journey and the road Ahead” Submitted By :-

2. There are two type of tax

3. GOODS AND SERVICE TAX GST is India’s biggest Tax reform after independence . GST is an indirect tax levied on supply goods and services across the country. GST was launched on 1 st July 2017 at mid night By Prime minister Narendra Modi and President Pranab Mukherjee . It is Under the 122 nd Amendment bill of the Indian constitution. GST implemented in our country with the motto of “one nation one tax”. GST replace multiple of indirect taxes like central excise tax, central service tax, value added tax ,service tax which are levied on different products , starting from the source of manufacturing till reaching the end customer. India follow dual GST model.

4. Good and Service Tax Slab . Branded garments, mineral water, Jam, IT services, hair oils, telecommunications, AC hotels, Financial services, etc cars, bikes, refrigerator, chocolates, Deodrants , perfume, stay in 5-star hotels, liquid soap, shaving gel, etc

5. GST COUNCIL GST Council is a governing body to regulate and direct each and every step for the implementation of GST in the nation with decisions over tax rates and further implementation measure. Article 279A of Constitution Act, 2016 GST council is created There are 33 member in GST council GST Council is headed by finance Minister. Union Minister of revenue department as a member this council. Then ,All the State F inance M inister as the member of GST council They all give recommendation to smooth implementation of GST.

6. history GST was launched on 1 st J uly 2017

7. Type of GST Assume tax @ 20% CGST 10% SGST 10% Within state IGST 20% Across States

8. GST replaced taxes existing in our economy GST subsumed 17 central and state taxes and 22 type of cess into one single tax such as:- Central excise duty Duties of excise Additional Duties of excise Additional duties of customer Special additional Duty of custom Cess State vat sale Tax Luxury Tax Entertainment tax Entry tax Tax on advertisement Tax on lotteries ,betting ,gambling.

9. Advantages of GST For Businesses : GST will be creating a common Indian market that will reduce the cascading effect of tax on the cost of goods and services. GST will ensure a common tax structur e let’s put it as a tax neutral policy across the country. This will bring ease in carrying out the business from anywhere across the country. With the uniformity in tax rates , there will be a reduction in the cost of locally manufactured goods and services leading to the reduction in compliance cost. Due to the reduction in transaction cost, there would be an improvement in the competitiveness amongst the businesses.

10. For Central and State Governments : GST backend with robust IT system would be replacing multiple indirect taxes which would simplify the administration of the indirect taxes levied by the Centrals and the State Governments so far. Due to a seamless design of GST, there is an easy transfer of tax credit from one stage to another encouraging tax compliance by the traders . GST is expected to generate higher revenue due to an expected increase in the collection of tax revenues. For Consumers: There will be a single transparent tax structure which will be proportionate to the value of goods and services. This tax will be enforced from the manufacturer to the consumer . There will be a relief in the overall tax burden due to efficiency gain and avoidance in the leakages which will benefit the consumers

11. Why gst introduced in India Narrow tax base – Indirect tax in our country is More inclined toward taxation on Goods rather than the services Before 1994, After 1994 Govt. permit central a nd state to bring service sector into taxation. GOI brought 3 Service (Telecommunication, Nonlife Insurance and stock Broker). After the year central govt. bringing More and more service under the taxation list. Tax administration unable to manage Tax evasion and avoidance by taxpayer. GST resolve the complexities of indirect tax, Indirect tax also treat goods and services separately. year Share of service sector in GDP(%) Service tax revenue( Rs . Crore ) Share of service tax in the gross tax revenue of the centre(percent) 1994-95 45.0 407 0.44 1999-00 50.0 2128 1.24 2004-05 53.0 14200 4.66 2009-10 54.7 60941 9.35 2015-2016 61.5 211414 14.52 2018-2019 54..4 922600 10.9

12. #Manufacturer Raw Material = 100 (incl. 10%) value = 30 -------------------- Cost Price = 130 Tax @10 % = 13 -------------------- cost price =143 #Wholesaler Cost Price = 143 Profit Margin = 30 ------------------- 173 Tax @ 10% = 17.3 -------------------- #Retailer 190.3 #Manufacturer Raw Material = 100 ( incl . 10%) value = 30 ------------------- Cost Price = 130 Tax @ 10% = 3 (13-10) ---------------- cost price = 133 #Wholesaler Cost Price = 133 Profit Margin = 30 --------------- 163 Tax @ 10% 3.3(16.3 –13) ------------- # Retailer 166.3 Old Tax system New Tax system Cascading effect of the complex Tax system – it is a situation wherein a consumer has to bear the load of tax on tax .

13. Blackmarketing of indirect tax T he generation of black money were the multiple Indian indirect tax laws, which had no mechanism to check unreported income, as tax laws such as Excise, VAT, Service Tax, etc. are administered by different authorities who had no clue about the extent of unreported transactions . The purpose of GST system is that every supply of goods and services will be taxed at the source of origination and at every stage of supply, right from manufacturer to retailor to customer. I t is mandatory to get registered under GST when they cross a threshold limit of Rs 20 lakhs and upload all transactions on to the GST portal . If a vendor fails to upload his/her sales, it would be at the cost of the buyer losing the tax credit and hence, the buyer will stop buying from a vendor who does not declare his/her sales . GST strikes at the root of where black money gets generated. The GST is not just a tax reform, it is truly the black money law and the biggest social reform that the country has ever seen since Independence .

14. Why gst still lacking behind GST still not applicable on Petroleum product ,electricity ,and human consumption liquor and real state – These product is not only a central but also a huge revenue for state .Tax revenue of 45% - 50% of the state come from petrol and diesel. Now the taxes impose on petrol by the government is 45% to 50% , and diesel 35% to 40% of tax . Main source of revenue generation for the state government. This is the reason why state government always wanted to kept out side of GST these item

15. CHALLENGES IN IMPLEMENTATION OF GST: GST has made the taxation system easy but the entire process from return filing to tax payment has been done through computer application. Every aspect has become an online process . Most of the small and medium enterprises may not be easy for them to adopt this change. GST assumes much higher technical standards which may still be a great impossibility for small enterprises. In India dual model of GST was adopted with the tax slabs of 5, 12, 18 and 28%. The slabs still to some extent are of multiple natures posing challenge to self objective of GST. Under GST an tax liable has to file 37 returns in a year, 3 per month and 1 annually as compared to that of 13 returns in the earlier tax system. This 37 return is for one state and if you have multiple state of operation the number of return to be filled shall increase proportionately. This will definitely increase the amount of cost in terms of compliance, logistics etc.

16. The telecommunication sector assumes a serious problem as on the one hand the government is initiating digital India and on the other hand telecom services is getting costlier as telecom services will attract GST tax rate of 18% which is 3% higher than the previous service tax rate. Government had incorporated goods and services tax network(GSTN), which is responsible for developing GST portal to ensure services like GST registration, GST return filling, IGST settlement, etc. which requires robust IT network . It is widely known that India is in an primary stage as far as IT network connectivity is concerned. The greatest problems in implementation of GST are that the companies need to improve their tax and IT infrastructure entirely. So that they could execute GST law. Trained and skilled man power with updated GST subject knowledge are not easily available, this had created an additional work load on professionals across industry

17. How can we strengthening this Tax regime(suggestion) There should be a clear indication about type of product and tax rates individually for the benefit of all stakeholders and for transparent taxation system. .An intense and deep training is needed to make the work force entirely capable of handling the new tax regime. Moreover workshops and conferences may add up to increase the knowledge about GST. Filing 37 returns per GSTIN is very time consuming and costly matter, where in every one may not have the resources to meet up the compliance. So processes must be simplified Reverse charge payable by registered dealers in case of purchase from non registered dealer shall be completely withdrawn Tax payer education or public awareness campaign need to be provisioned by Central Government. Public Workshops, training and various seminars on GST must be conducted in all states by their respective State Governments. Government should construct a proper monitoring system for monitoring the dummy registrations and refunds problems.

18. GST in other country The Goods and services tax or GST which is popular as what it is all over the world was first introduced in France in the year 1954 and subsequently more than 160 countries had implemented the GST law like Germany, Italy, UK, South Korea, Japan, Canada, Australia, etc. Most of the countries had adopted unified GST while some countries like Brazil, Canada follow a dual GST system where tax is imposed both by central as well as by state government.

19. Other country GST country Name of indirect tax Date of implementation Gst rate Structure France VAT or consumption Tax 1954 2.1%,5.5%,10%,20%. Unified Gst model Canada Federal goods and service tax and harmonized 1 st January 1991 HST varying from 0% to 15% & GST 5% Dual GST model Japan VAT April 1989 5% Unified Gst model India GST 1 st July 2017   0%,5%, 12% 8% and 28% Dual GST model Pakistan VAT 1992 18% Unified Gst model UK VAT(value added tax) 1973 20%,5%,0%. Unified Gst model China VAT and CT (consumption Tax) 1994 0%,5%,19% Unified Gst model

20. conclusion India has experienced one of the greatest indirect tax reforms in its history. GST has now been in India for about 5 year . It has subsumed almost all the indirect taxes and unified the nation under one tax umbrella of GST. As discussed earlier it has reduced the burden numerous tax complications, which has made the products of basic need much cheaper than earlier thus making it accessible for poor section of the society .GST eliminated the cascading effect from the tax system. The major benefits include the reduction in tax multiplicity, free flow of goods and services etc. these benefits have a major contribution towards sustainable development of the country. And after the implementation of GST revenue on indirect tax gradually increasing in the year 2015 – 16 revenue collection of Rs. 709825 crore and in the year 2019 – 2020 revenue collection 1222131 crore which prove that government taken a positive step to introduced the GST in india . Hence, Government of I ndia successfully implemented the GST tax reform , I ndian government proved their motto of implementation that is one tax one nation