6 important things you must know about gst goods and service tax in india:
- Gst is payable on supply: in gst system, gst is applicable on import of service, barter, lease and sale.
- The taxpayer will be given state wise pan based 15 digit GSTIN (Goods and Services Taxpayer Unique Identification Number)
- Gst is determind at the time of supply of goods and services.
- Gst is payable actual price payable or paid amount of goods and services.
- You can avail input tax credit in gst. But there is one things that you should keep in mind gst tax credit is not allowed on products that are destroyed, stolen, given as gift or free et c.
- There are some cases where gst is paid by recipient instead of supply. This case is known as RCM (Reverse Charge Mechanism).
- Intially, the product like alcohol and petrolatum is excluded form gst application. Because state government earn a big tax amount from these product.
There is short term impact of gst on service industries. Service tax is increased by 3% from 15% to 18%. The decision of gst is highly accepted in india. It will become the currently indian tax system more easy and simple. It will create on tax one nation prospect in india that will help government as well as consumer.
As you know consumers have to pay more tax in case of old taxation procedure. But after the application of gst, consumer will get benefit. He has to pay the tax as per gst law. In beginning, the application process of gst will be little bit difficult. Because every new prospect or things will take time to understand and process. Accountant and ca have to understand the new concept of gst tax calculation. Their old taxation knowledge will be useless. They have to start from the beginning. It will create some problem for accountant. Some business also have to suffer loses due to increase in tax rate. There may be some industry where tax may be decrease that will get benefti of new tax rate of gst.
In my point of view, gst is very good step by our government to make one tax in one nation. It will simplify the taxation process among people. There are so many indirect tax like service tax, dvat, etc. all the indirect tax will change into one tax I mean gst. We should support this decision of our government and contribute as much as we can to making it successful.