6. Proposed GST Rate
Items Total GST Centre State
rates (in %)
Goods 20 12 8
Services 16 8 8
Essential 12 6 6
Goods
Presently it is (26.5 % , CENVAT-14 % and State VAT 12.5% )
15. We all have come a long way. With a bit of more effort, the day is not far
when GST would actually become applicable in India!!
16. IMPACT OF GST ON FINANCE SECTOR
1. Banking
Impact under GST
Increase in effective rate from 15% to
18-20%
Impact on Consumers : Marginal increase in prices
17. 2. INSURANCE
Impact under GST
Increase in effective rate from 14% to 18-20%
Insurance policies: life, health and motor will begin to
cost more from April 2017 as taxes will go up with
respect to the GST. From risk point of view, in today the
tax charge on insurance policy premium is around 14
percent then under GST, the rate could go up to the 18
percent. Therefore, overall insurance policies could
become costlier
Impact on Consumers : Marginal increase in price
18. FLAWS OF GST MODEL
Major flaw of this model is ,Local Dealers have to pay
CGST in addition to SGST.
In Addition to this, CGST mainly represents the
Excise/service tax and SGST mainly represents the
VAT portion but, because of ‘No differentiation
between Goods and Services’ service supply within
the state would attract SGST as GST is levied at each
stage in the supply chain and Assessee have to Pay
CGST as well SGST.
The issue which still needs to be resolved are, the
revenue sharing between States and Centre, and a
framework for exemption, thresholds and
composition.
