Goods and Services Tax (GST) is the country’s largest tax reform since Independence. GST Apply same tax law to the whole country. There are lot of important facts about GST taxation system. the Government has to apply a single taxation system in entire country for all goods and services. After the GST implemented Excise duty, Service tax, Additional custom duty, Special Additional Custom duty, VAT, Sales Tax, Central Sales Tax, Entertainment tax, luxury tax, Counter veiling duty etc taxes will be end.
After applying the GST on goods and services only three type of taxes will be levied. First CGST, CGST stands for Central Goods and Service Tax. CGST which will be recovered by the Central Government. Second SGST, SGST stands for State Goods and Service Tax. SGST will be recovered by the State Government on different business trading. Third CGST, CGST stands for Central Goods and Service Tax. CGST is applicable when any kind of business is done between the two states. It will be recover from the Central and both states in equal proportion.
12 interesting Facts about GST Goods and Service Tax
There are few important facts of GST which we discuss in this article, have a look-
Maximum 40 Percent Tax
GST Council has fixed four rates under the GST act. The slab of GST tax is 5, 12, 18 and 28 percent. But if there is a great need then tax slab has been increased up to 40 percent. This provide has been made in the GST bill. But as per present situation the maximum GST rate is 28 percent on goods and services.
Cess on Demerit Goods
There are lot of demerit goods on which cess will be applicable. Pan Masala maximum tax slab -135 percent, Cigarette – 290 percent, Luxury cars and carbonated drinks tax slab -15 percent.
Prisons on Tax evasion
If any business has tax evasion of above Rs 5 crore will be non-bailable. In this there is a provision of jail for 5 years. Interest on tax payments up to 18 percent may be required.
Rein on profiteering
Customers who have less tax will get the benefit of this. All those who don’t do this will be acted on. The Authority keeps the eyes on all those person who try to do this. If any do the same thing then penalty will be charge on those business.
Facts about GST Relief for small business
If any manufacturers make business up to Rs. 50 lakh per annum, have to pay the tax up to 2 percent (1 percent CGST and 1 SGST on total annual turnover). For restaurant it will be 5 percent (2.5 percent CGST and 2.5 percent SGST). For traders total tax 1 percent (.5 percent CGST and .5 percent SGST). If any business has annual turnover up to 20 lakh, there is no GST applicable, however in few states this limit of up to 10 lakhs only.
GST on E-Commerce
All E-Commerce companies will deduct taxes before paying their customers using their platform. The maximum limit of tax on E-Commerce is 2% (1% CGST and 1% SGST).
Reduce Product Cost
After applying the GST product cost decreased. If any company or factory manufacture any product and sells it to another state then he has to pay lot of taxes in both states. Due to that reason product cost has been increased. Now, after applying the GST the production cost reduced.
Decrease the Cost
After applying the GST production cost reduced. Companies and business will get the benefit of the GST. There is no problem is done during transfer goods from one location to another location.
Reduce Tax Rate
Before applying the GST you have to pay tax up to 30-35 percent during purchasing the goods. But after applying the GST the tax slab reduced and the tax percent come down up to 20-25 percent.
Composition Scheme for Small Taxpayer
All those small taxpayers who have opted the composition scheme shall have to fill the return on quarterly basis.
Decrease the Tax Disputes
The tax disputes decreased after applying the GST in country. The chances of manipulation reduced by the tax officers during collecting the tax amount. There is no need to pay tax multiple time. You have to pay single tax only at the place of all the taxes.
Growth Rate Increased
After GST implementation the export of goods and services will become competitive due to of nill effect of taxes done on goods and products. As per the research by NCAER GST is an important key revolution in Indian Economy. It could increase the GDP up to 0.9 to 1.7 percent. As per the tax experts the growth will be around 1 to 2 percent after the implementation of the GST. This will not only create new jobs for peoples but also increase the productivity.