Finally the indirect tax reform- GST, which the Indian economy has long awaited, is now ready to get applicable. It is likely to be one of the most important reforms contributing towards the economic growth of India.
GST is really a hot topic. A lot of businessmen are talking about it and interested in it. It can prove a ‘game-changer’ for them. So, let us take a minute to understand what exactly GST is and get aware of its different aspects.
What is GST?*
GST (Goods and Services Tax) is a consumption based tax levied on the sale, manufacture and consumption on goods & services at a national level. This tax will be a substitute for all indirect taxes levied by the state and central government. Exports and direct tax like income tax, corporate tax and capital gain tax will not be affected by GST. GST would apply to all goods other than crude petroleum, motor spirit, diesel, aviation turbine fuel and natural gas. It would apply to all services barring a few to be specific. With the increase of international trade in services, GST has become a global standard. The proposed tax system will take the form of “dual GST”, which is concurrently levied by the central and state government. This will comprise of:
- Central GST (CGST) which will be levied by the Centre.
- State GST (SGST) which will be levied by the State.
- Integrated GST (IGST) – which will be levied by the Central Government on Inter-State supply of goods and services.
Finalized structure of GST rates*
How is it beneficial to a common man?*
Common man is always at the heart of the governmental reforms. So, if the government is bringing GST into action, it is beneficial to the citizens of India. And, here are its benefits to a common man:
- A unified tax system removing a bundle of indirect taxes like VAT, CST, Service tax, CAD, SAD, Excise etc.
- Less tax compliance and a simplified tax policy as compared to earlier tax structure.
- Removes the cascading effect of taxes, i.e., removes tax on tax.
- Due to the lowered burden of taxes on the manufacturing sector, the manufacturing costs will be reduced, hence prices of consumer goods likely to come down.
- Due to reduced costs some products like cars, FMCG etc., will become cheaper.
- This will help in lowering the burden on the common man, i.e. you will have to shed less money to buy the same products which were earlier costly.
- The low prices will further lead to an increase in the demand/consumption of goods.
- Increased demand will lead to increase in supply. Hence, this will ultimately lead to rise in the production of goods.
- The increased production will lead to more job opportunities in the long run. But, this can happen only if consumers actually get cheaper goods.
- It will curb the circulation of black money. This can happen only if the “kacha bill” system, normally followed by traders and shopkeepers is put to check.
- A unified tax regime will lead to less corruption which will indirectly affect the common man.
- Most importantly, GST will help to boost the Indian economy in the long run.
When is it applicable?
The Goods and Services Tax, also known as The Constitution (One Hundred One Amendment) Bill, is proposed to get implemented in India from 1 April 2017.
BatchMaster’s readiness for GST
With the declaration of GST implementation, the business world is witnessing a rise in concerns regarding incorporation of GST into their existing framework. Most companies have initiated discussions with their IT partners and financial advisors for upgrading their ERP software. It needs to be made capable of tracking goods, analyzing tax and other cost implications, as per the new tax structure of GST.
BatchMaster, one of the leading developer of enterprise solutions, has always monitored the local and global trends of the market. The company understands new reforms completely, and then develops the product before offering the solution to help its customers’ run a better business.
So, BatchMaster has geared up for GST and has designed specifically crafted ERP modules for GST. It has structured a model that would be capable to handle different form formats, input tax credit, unique keys for CGST, SGST and IGST, their adjustments, and other features/rules stated under the proposed structure of GST.
So BatchMaster is ready with the GST regime to give a fresh start to your business.