Simplified single Indirect Tax GST regime from 1st July 2017

Simplified single Indirect Tax GST regime from 1st July 2017

Posted by P. Charitha on May 8th 2017

What can be termed as the biggest tax transformation since India's independence, the Goods and Services Tax (GST) reform will replace an assortment of Central and State levies with a single national sales tax! This will create a single market and ease the way to do business in the country and according to the Finance Minister Mr. Arun Jaitley, the Goods and Services Tax (GST) is on schedule for implementation from the 1st of July  2017.   The GST Council headed by Mr. Jaitely & representatives of all states, will in the coming few days finalise the rates of tax for different goods and services and will roll out the simplified indirect tax regime.
 
The GST Council, which had previously finalised a four- tier tax structure of 5, 12, 18 and 28 %, is scheduled to set different commodities and services in the decided tax brackets at the GST Council meeting to be held on May 18th  and 19th 2017. Tax rate closed to the existing incidence of total central and state levies will be chosen as the slab for a good or services.
 
The major advantage of the GST is that we will have a simpler, efficient and clean form of taxation system. This would ease the very processes of doing business in the country tax evasion will become difficult when compared with old system.
 
GST and Start-up advantage
 
As per a report in MoneyControl.com, due to the simple IT process which will come in place and there is no need for multiple forms for filing tax returns.
The efficiency in the GST system will increase trade, tax collection and improve ease of doing business.
Start-ups believe it will simplify & reduce cross-border corruption between states, and let them claim the credit on taxes paid on expenses in their companies.
Major taxes like excise duty, octroi, service tax, special additional duty and VAT (value added tax) will be subsumed into a single tax called GST.
In the short-term, sellers would have to file a return thrice in a month, compared to once in six months. 
Start-ups which provide services will also benefit from the service tax exemption limit which has been raised to Rs 20 lakh from Rs 10 lakh earlier.
For the logistics sector the removal of taxation bottlenecks at state borders through one tax will make India as one market. It will also reduce anomalies of the price difference of goods between states.
Taxation software start-ups which are into e-commerce and their logistic costs goes up with 11 categories of taxes levied on the road transport sector. GST can reduce logistic costs of companies producing non-bulk goods by as much as 20 percent.
Online start-ups sellers are happy with the move as they can also offset total tax liability against tax paid on expenses such as office furniture, which was currently not possible.
Sellers selling product at a loss will be discouraged, reducing fraud. Tax collection at source (TCS) for online marketplaces will ease business for sellers.

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