1GOODS AND SERVICES TAX(GST)

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3What is GST?

COMMON INDIRECT TAX BETWEEN:

4How does it work? Single tax on the supply of goods & services. Taxes paid at each stage is available in the

subsequent stage of value addition. Final consumer will thus bear only the GST

charged by the last dealer.

5How would GST be administered in India?

COMPONENTS OF GST

CENTRAL GST(CGST)

Centre would levy and collect CGST on all transactions.

STATE GST(SGST)

State would levy and collect SGST on all transactions.

6Advantages of GST: Essential in the emerging environment. All the taxes are integrated. Makes taxation burden to be split equitably between

manufacturing and services. GST will be levied only at the final destination of consumption. This will help in removing economic distortions and bring about

development of a common national market. It will also help to build a transparent and corruption-free tax

administration.

7Disadvantages of GST:GST would impact negatively on the

real estate market. Some Economist says that CGST,

SGST and IGST are nothing but new names for Central Excise/Service Tax, VAT and CST.

8COMPARISON OF GST RATES:

INDIA AUSTRALIA FRANCE SWEDEN JAPAN UK0%

5%

10%

15%

20%

25%

30%

COUNTRIES

COUNTRIES

9Challenges faced while implementing GST in India:• Manufacturing states like Tamil Nadu ,Gujarat- not

satisfied.• Increase tax on services-which contributes almost

60% - GDP and make them costly- thus hamper economic growth for some initial years.

• Corporate sector-not prepared at present which could make GST implementation-less effective.

• Since indirect taxes are regressive in nature- would affect poor most for initial years.

• In short run -will create inflationary pressure also.

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