Definition: GST i.e. Goods And Services Tax. That means it will be a single taxation structure. It is an indirect tax and will lead to abolition of octroi, central sales tax, service tax, central excise tax and VAT. Both central ans state governments will impose GST on good and services produced and the imports in the country.
Categories exempted : Income tax, Corporate tax, and capital gains. Apart from this exports, alcohols and petroleum products will be kept out of GST.
Benefit to economy : As there will be single taxation structure in the country it will lead to simplified and transparent tax structure. It will broaden the tax base and create a common market across states.
Report by NCAER( National Council For Applied Economic Research) told that there will be an increase in GDP ratio . An increase growth in between 0.9% to 1.7%. Exports will increase between 3.2% and 6.3% while imports increase 2.4-4.7%.
Benefit to Corporates : As earlier companies have to pay extra cost that increases the cost price of goods and services making them less competitive to China or other powerful countries and time wasted in filing myriad taxes deters the entrepreneurs in investment in India.
Will Goods and services become costly ? : well after the implementation the highest rate of taxation for the 1st year will be around 15% and for the second year will be 12%. However GOODS deemed necessary or of basic needs will taxed at a lower rate.
State Governments Loss ? : Some states do fear that GST will lead to denting the collections. However central government says that it will compensate for the revenue losses. Mr Arun Jaitley said that an amount of Rs 11000 Crore has been set aside for this purpose.