GST – Is It Really A Birth Of New Regime

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At the time when cabinet approved the GST draft bills, the original idea of GST was replaced by the GST council recommendations. It was very clear that this creates an intense competition in between claimant tax regimes. Because of the immense pressure from the states, GST council decided to make the collection on different goods and services to state tax departments.

Today the scenario of indirect tax laws is not anymore dependent on the action of the parties. Agreeing that tax departments work under very intense pressure, the revenue targets can easily be met. According to the GST plan visualization, the supplying state can easily be cooperating with different state and collect the revenue. The GST is a much awaited regime that affected various sectors of the Indian textiles and apparel industry. GST is very beneficial in a very long run and brings the difference in opinions.

The propose GST law for numerous services adopts the residence as a key element for determining the place of provision. Most of the apparel and textile industry had expected a uniform tax structure and GST meets all the expectations. Present as a structural reform, it has the capability to change the entire taxation landscape. No doubt anti-profiteering has become an additional compliance burden and brings an increase in the litigation and potential harassment. About 37 returns are filed in a year under the GST process on the portal. As this is a very crucial thing, the proper running of all the arrangements requires access of internet and people who are digitally literate.

In the market, there are various multi-location service providers like telecom operators, banks and insurance companies who are constantly keeping a check on the huge compliance burden. After the implementation of the laws, conflict between the centre and state tax authorities also started. Previously, the taxation comes under the realm of the Central government, but it has been changed now and any firm can deal in goods or services under the state authorities.

According to the GST bill 2017, the central government has to notify about the CGST rates. This shows that government can change the rates up to a cap of 20% without getting the approval from the parliament. Those laws who levy taxes and there is any change in this tax has to be approved by the parliament. Imposing of excise duty will be continued by the Central Government and imposed on five petroleum products like petroleum crude, high speed diesel, motor spirit, aviation turbine fuel and natural gas.

For any company’s liquidity, working capital is a common measure of high efficiency and overall health. The impact can clearly be seen in the manufacturing sector and municipal finance. The Urban local government of different states offers varieties of taxes and among them the most common are property/house tax, professional tax, vehicle tax, tolls and Octroi.

If we think of the fact, Goods and Services Tax is a much needed reform and when implemented correctly can bring wonder in the India’s economy.

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