The Way Towards GST: GST stands for “Goods and Services Tax”. The Goods and Services Tax is likely to be implemented soon and many people are worried about the same as they are either confused about the provisions and implementation of GST or are largely unacquainted with it. In my opinion, learning something new is easier than teaching someone something new. Therefore it is wise that we all start learning about GST on our own rather than waiting for it to be implemented. GST, as proposed, is expected to be a comprehensive single indirect tax levy on manufacture, sale and services. GST is levied at every stage of production and distribution chain with set off available for tax paid at the previous stage of production and distribution chain. Under GST system, tax is levied on value addition at each stage of sale or purchase of goods or services. There is no difference between taxable goods and taxable services and they are charged at a single rate till they reach the final consumer. Recently, the Constitution (122nd Amendment) Bill, 2014 (“GST BILL”as it is popularly known), has been passed in Lok Sabha on 6th May 2015. However, the most significant part of this motion was that the bill was passed by more than two-third majority after clause by clause voting. Features of an Ideal GST System: Under GST, registration is likely to be linked with the existing PAN. The new business identification number is likely to be a 10-digit alphanumeric PAN, with an addition of two digits for state code and one or two check numbers for disallowing fake numbers. The total number of digits in the new number is likely to be 13-14 (also known as BIN-Business Identification Number). There might be one common tax return for both Central and State taxes, with one copy given to the Central authority and the other to the relevant State authority. Moreover, the returns are likely to be filed online only. The tax payment challan may contain some additional information like amount paid for CGST which will also be reflected on SGST challan & vice a versa. Taxes Likely to be Subsumed Under GST: Benefits of a Comprehensive GST System: Implementation of GST will abolish multiple types of taxes on goods & services. It will reduce the effective rates of tax. It will reduce compliance costs. It will help in reducing the cascading effect of taxation. It will reduce the cost of production of goods & services which will result in increased demand & production of goods & services. It will reduce litigation and ultimately corruption as there will be no ambiguity about taxes. It will reduce tax rates by broadening of the tax base which will lead to an increase in the revenue to central & state government. Investment decisions will be made on the basis of purely economic concerns independent of tax considerations. A recent study on impact of GST on foreign trade indicates that GST will result in significantly higher Exports than imports. Implementation of GST in Canada has increased their GDP by 1.4%. Similar positive effects are also expected in India which will be the biggest benefit of GST. Present Situation: While the Government has crossed its first major hurdle by passing the Constitution (122nd Amendment) Bill, 2014 (“GST BILL”), now it will be interesting to see how it deals with the challenge in Rajya Sabha where it does not enjoy a majority. “The best is yet to come” Author: Gopal Santosh Darak CA Final Student Mail Id: [email protected] Contact No: 8421124474 Disclaimer: This is a user submitted article. We, at Chartered Club do not vouch for the veracity of facts stated in this article.