We all have heard about it, we all have seen it on our bills/invoice copies. a number of us may have even gone into long hours of discussions/arguments with colleagues/friends/relatives over tea & coffee breaks about it. it's not just panels of experts, economists, politicians and business men who pondered it, but the entire of year 2017 saw the trade & business undergo a paradigm shift in India, with its introduction.
Yes, Ladies & Gentleman – we are talking about the over debated, the large brother of taxes – GST. Or for a few of these who should not know what it stands for GST Advisory Services Online in India. Its pros, its cons – Financial & Accounting Experts have talked enough & more about it in media – both digital & print. thereon note, allow us to take a fast sneak – peek into the wondrous world of GST.
GST is an tax which has replaced many Indirect Taxes levied on goods & services by the Indian central & state governments. Passed within the Parliament on 29th March 2017, the Act came into effect on 1st July 2017. As a tax reform, it's aimed to get rid of taxation barriers between states and make one market which is hospitable all to shop for , sell, import and export within the country. Goods & Services law in India may be a comprehensive, multi-stage, destination-based tax that's levied on every value addition.Phew! Big Words.
GST is an tax which has replaced many Indirect Taxes levied on goods & services by the Indian central & state governments. Passed within the Parliament on 29th March 2017, the Act came into effect on 1st July 2017. As a tax reform, it's aimed to get rid of taxation barriers between states and make one market which is hospitable all to shop for , sell, import and export within the country. Goods & Services law in India may be a comprehensive, multi-stage, destination-based tax that's levied on every value addition.
Let us check out it from an easier lens! Basically, GST is one tax for the whole country. A product has got to undergo different stages before it reaches the top consumer, and there are several taxes wont to be applicable throughout this process. the sooner tax on tax regime wont to levy an accelerating tax at every stage a manufactured product wont to go through; making the last word cost to consumer relatively higher. However, this example changed after the GST regime. Let’s understand here-
Erstwhile tax System-
-> Raw Materials Supplier Sells At Rs. 100/-
-> Manufacturer Sells At Rs. 154 {Rs.40 Value Addition + 10% tax on 140}
-> Wholesaler Sells At Rs. 202.4 {Rs.30 Value Addition + 10% tax on 184}
-> Retailer Sells To Consumer At Rs. 232.4 {Rs.10 Value Addition + 10% Tax on Rs. 222.4}
-> Current GST System- Raw Materials Supplier Sells At Rs. 100 (Inclusive of GST at 10% of Rs. 100)
-> Manufacturer Sells At Rs. 144 (Rs 40 Value Addition + Actual liabilities of Only Rs. 4 as Rs. 10 has already been paid by the raw materials supplier}
-> Wholesaler Sells At Rs. 191.4 {Rs 30 Value Addition + Actual liabilities of Only Rs. 3.4 as Rs. 14 – has already been paid by staple supplier (Rs.10) & manufacturer (Rs.4)}
-> Retailer Sells To Consumer At Rs. 201.8 {Rs.10 Value Addition + Actual liabilities of Only Rs.2.78 as Rs. 17.4 as already been paid by staple supplier (Rs. 10) & manufacturer (Rs. 4) & wholesaler (Rs. 3.4)}
So, a product that cost Rs. 232.4 within the erstwhile indirect taxes regime now costs only Rs. 201.8 under Big Brother’s GST Advisory Services. Voila!! Could that specify why the buyer purchasing trends are on the rise? Maybe, might not be. But we all know one thing needless to say – GST Registration Online has reformed Indian business in additional ways than one. Well what are the opposite ways of transformation? That’s for later, Folks!