16th April 2017
Good and Service Tax is a tax regime which will lead to tax variation in India. In the reign of GST will attract higher rates on Service tax from 15 % to 18%. This will make services more expensive said by the Revenue Secretary Hasmukh Adhia
This will not have much of its impact on sectors like healthcare, agriculture, and education. GST council will view the Tax rates. According to the present tax regime, the services sector is taxed at 14 percent with two additional cesses such as Swachh Bharat Cess and the Krishi Kalyan Cess which will attract half of the percent of each taking the burden to 15 percent.
People involved in agriculture and who employ themselves or their family members -- will not come under GST even if their turnover is over Rs 20 lakh annually. But people employing persons and have a turnover of over Rs 20 lakh a year will have to register under the GST.
It is dicey whether sericulture, floriculture, dairy, horticulture are going to be under GST or not. People involved in activity other agriculture have to register under GST. In this case, it is not fixed whether the product under them will be taxed or not. The exemption list is not ready since this will be separately decided by the Council. Some services which currently have less than 15 percent tax rate may attract lower rates.
Things are under cross check those entities that have the tax rate lower than 15 percent. The council will make sure that things will not be under much disturbance. Since Transport sector attracts lower than 15 percent tax right now. This can be 5 percent or 12 percent. This can be due to the petrol and petroleum products have been kept zero-rated therefore transport can be a good candidate for 5 percent tax rate.
Around 60 services are covered under Service tax this also includes service tax, education, healthcare and religious pilgrimage. There is particular formula according to which tax rates will be calculated.
There will be a meeting in Srinagar of the Council on May 18-19 in Srinagar to decide on GST Rules. GST can be implemented after July or may be postponed because some industry stakeholders demanding further postponement of the new tax regime.GST will have the live testing from the first week of May.
GST will lead to greater compliance burden as companies having a physical presence in more than one state which needs multiple registrations and pays taxes separately to each state.
There will be slightly greater compliance burden on the centralized service sector operators because they have to pay tax to all the states. Practically the Centralised Service Sector is full under GST model.
2017 © Monetic Corp Consultants Private Limited - U74999DL2013PTC261819
Download GST E-book, An introductory guide for Goods and Service Tax by Registrationwala.
Like every GST liable business, you'll also need a GST software. Registrationwala has come up with a return preparing and filing software GST Tool.
To schedule a online demo, submit your details.