It provide a brief insight into new fiscal reform: Goods and service tax

1. Roll – 124 to
133

2. What is GST
 The Goods and Services Tax Bill or GST Bill,
officially known as The Constitution (One
Hundred and Twenty-Second Amendment) Bill,
2014, proposes a national Value added Tax to
be implemented in India from June 2016.
 "Goods and Services Tax" would be a
comprehensive indirect tax on manufacture,
sale and consumption of goods and services
throughout India, to replace taxes levied by
the Central and State governments..

3. GST timeline (India)
 In 2000, the Vajpayee Government set up a committee
headed by Asim Dasgupta to design a model for GST.
 An announcement was made by P Chidambaram, the Union
Finance Minister, during the central budget of 2006-07, that
GST would be introduced from April 1, 2010.
 On the basis of discussion and the written observations of the
states, certain modifications were made, and a final version
was prepared and was sent to the Government of India (April
30, 2008).
 After several political and constitutional delays, draft of the
Constitutional Amendment Bill has been prepared and has
been sent to the EC for obtaining views of the States.
 The Goods and Service Tax Bill or GST Bill, officially known as
The Constitution (122nd Amendment) Bill, 2014, would be a

4. GST and India (Advantages)
 The GST also subsumes within it the taxes like Excise
Duty, Additional Custom Duty, Luxury Taxes etc. This
means that in GST regime the producers will be relieved
of filling multiple returns.
 Amalgamating several Central and State taxes into a
single tax would mitigate cascading or double taxation,
facilitating a common national market. The simplicity of
the tax should lead to easier administration and
enforcement.
 From the consumer point of view, the biggest advantage
would be in terms of a reduction in the overall tax burden
on goods, which is currently estimated at 25%-30%.

6. Current status of GST

7. How it Works
 Taxable goods and services are not distinguished
from one another and are taxed at a single rate in
a supply chain till the goods or services reach the
consumer.
 Goods and services tax would be levied and
collected at each stage of sale or purchase of
goods or services based on the input tax credit
method.
 Administrative responsibility would generally rest
with a single authority to levy tax on goods and
services. Exports would be zero-rated and imports
would be levied the same taxes as domestic

8. GST Difference in calculations
Let's take an example of Tooth Paste Manufacturer.
Assume there is a tooth paste manufacturer that
procures raw materials at :-
 1000 Lakhs per batch - 500 Lakh of raw material from
the same state and 500 Lakh of raw material from the
other state.
 The manufacturer keeps his operating profits at 200
Lakhs and encumbers a processing cost of 100 Lakhs.
The flow would look something like this :-
Lets us understand the difference in calculation and tax
savings in respect of GST.

9. In present regime In GST regime
Total tax paid on sale= 65 lakhs Total tax paid on sale= 65 lakhs
Credit available= 25 lakhs Credit available=25 Lakhs(VAT)+10
Lakhs(CST)+5 Lakhs(entrytax)
Net tax paid= 40 lakhs Net tax paid= 15 lakhs
Savings= 25 lakhs
 The producer in the present regime only has an input tax credit
of 25 Lakhs. In GST regime the producer will get the credit of VAT,
CST as well as Entry Tax . The GST hence, reduces the tax
burden on producers.

10. Reference
gstindia.com
economictimes.in
wikipedia.com
businessinsider.in

11. Thank-You !