India’s varied indirect tax structure will soon be unified, bringing taxes levied on goods and services down. A broad consensus formed between the Center and States is likely to agree to a 16 percent Goods and Services Tax (GST), 8 percent of which will be levied by the center and approximately 8 percent by the states, the Times of India reported.
If GST is above 16 percent, it will derail the stimulus package and the industry’s ability to remain competitive, R Muralidharan, ED, PricewaterhouseCoopers told the Economic Times.
The Ministry of Finance has said that the GST will be levied on all companies and traders with an annual turnover of Rs 1 million (US$21,370) and above. This is expected to cover about 4-4.5 million assessees, making sure neither the center nor the state suffer any revenue loss.
The comprehensive GST is being implemented in order to streamline India’s multi layered tax structure, usa sildenafil bringing several indirect taxes which are levied at different rates by different states such as VAT, service and excise tax and which could otherwise sum up to 30 percent, under a single umbrella. The GST was initially to be implemented by the beginning of the fiscal year, April 1st, 2010, however disagreements on exemptions and legal amendments between the center and state governments has pushed the deadline back by six months. The GST is expected to have 50 items on a exemption list which will continue to pay separate central and state taxes.
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