We are expecting that the new regime of GST in India will have an important influence on the Indian Trades and will have a worthy affect the business established in India.
A new regime of GST in India will create the targeted revenues with the minimization of exemption. It’ll broaden the taxes base and decrease the tax premiums. GST is dependent on destination principle, so the distortions will be reduced fostering a common market throughout the country. The compliance cost can come down and the trade and industry will become more competitive resulting in a growth in exports and lower costs for domestic consumers.
As we know the impact of GST, Central and State taxes will be subsumed, comprehensive set off of input goods along with services and phasing from CST would decrease the cost of local manufactured goods and services. This will boost the competitiveness of Indian goods and services in international market and thus boost to the exports.
In GST, Exports will be zero rated. As a result, the exporters will soon be eligible to claim the refund on the eligible input tax credits subject to conditions, constraint and procedures. Identical benefits may be given to Special Economics Areas and specific zones (SEZs). Such benefits are only going to be allowed to the processing regions on the SEZs. No benefit to the Sales from a SEZ to DTA will be allowed.
Equally CGST and SGST will be levied on Significance of goods and services to the country. The incidence of tax will track the principle of destination based taxes. The SGST of the State will be applicable where the goods are consumed. Complete and whole set-off will be obtainable on GST paid on imports with goods.
In the impact of GST, the relief is given to those who have Small businesses. They’re out of the purview of the particular GST, means that the businesses having an annual turnover of less than Rs 10 lacs will be exempted from GST.
Also, in the awareness of small investors a814nd small size industries and to prevent dual control, the State considered the threshold for CGST tax for goods might be kept at Rs 1.5 crore and the threshold for services must also be large.
The IT infrastructure requirement will undoubtedly be shared by the Central Government through the utilization of its own IT infrastructure ability. The problems of tying in the State Infrastructure facilities while using Central facilities and further improvement with the States own structure, including TINXSYS, is to be attended to expeditiously and in a period bound manner.
Alcohol based drinks will be kept out of the purview of GST. Sales Tax/Vat might be still be levied on alcohol based drinks as is prevailing in today’s system. There is no objection if the State imposes Vat on it and if inflict excise duty which could also to not be affected. On the other hand, tobacco products will be subjected to GST.
And for petroleum products, the basket of petroleum products will be left out of GST as is the usual practice in India. Sales Tax could still to be levied on these items.