Know about GST
GST is considered to be the India’s biggest indirect tax reform. It’s a multi-stage, destination based tax levied at each stage of value addition. The main objective of the GST Bill is to implement a single tax structure right from the manufacturing stage till the goods or services are delivered to the final consumer.
It’s a single tax with full set-off for taxes paid in the earlier value chain. GST includes 17 indirect taxes and 23 cess. This tax reform would make doing business in the country tax neutral.
- GST has brought together a number of indirect taxes under one umbrella, simplifying taxation for service and commodity businesses.
- Experts believe that costs of products and services will be reduced in the long run with the introduction of GST. This is because the cascading effect of taxes has now been erased.
- Small business entity whose turnover is less than Rs 40 Lakh is exempt from GST. ( Subject to certain conditions). In case of North Eastern states, the threshold is at Rs.20 lakh. This will help the small businesses avoid lengthy taxation procedures.
- Companies with a turnover up to Rs.1.5 core under the GST taxation process can benefit from composition schemes and pay a minimal tax .This will help them follow a simplified taxation process.
- GST brings uniformity in the taxation process and allows centralized registration. This gives a chance to small businesses to file their tax returns every quarter via an easy online mechanism. This reduces the multiplicity of taxes as they do not have the resources to hire tax experts.
(Disclaimer- Please refer the GST Law for the definition of the terms)
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