After Demonetisation Goods and Service Tax, shortly known as GST has recently become one of the most trending topics in India. A sudden awareness is seen among the people, especially the students about GST.
Most people are still in the dark as they don’t know how will GST help them or what the GST benefits. So in response to that Guidetoexam.com bring to you all the solutions to your questions or queries regarding GST or GST benefits.
GST benefits the Consumer and the Society
This GST-explained guide would be in-depth and concept-clearing for everyone who reads this. By the end of this GST essay/article, you will be having a conventional knowledge of this particular niche.
Simply it can be said that GST is explained from A to Z in this essay by our team for you. Here we will try to give you a complete idea about GST and GST benefits along with some other queries like “How to calculate GST? How will GST help you?” etc.
Now let’s deal with the main topic.
Introduction to GST- At the very outset of the essay we need to know What is GST or Goods and Services Tax. The GST or Goods and administrations Tax is an esteem included Tax (VAT) is proposed to be a thorough aberrant duty exact on the maker, deal, and utilization of products and in addition administrations at the national level.
It is a bill that will supplant all circuitous duties exacted on products and enterprises by the central and state government.
In other words, we can also say that GST is a bill that will subsume all roundabout expenses forced by central or state government including excise duty, additional excise duties, service tax, additional customs duty, value-added tax, sales tax, entertainment tax, (locally imposed by different local bodies), central sales tax, entry tax, purchase tax, luxury tax, tax on lottery, etc.
When and how was GST is introduced in India?
Though every one of us is eagerly waiting to know the GST benefits or how will GST help us, at first we need to know the very beginning of the bill. We all know that in order to introduce a new bill in our country, some legal or constitutional procedure needs to be followed. GST bill is also not an exception.
An amendment to the Indian constitution has been made to introduce the GST bill in India. The 102 amendment bill of the constitution of India which is formally known as the constitution (one hundred and first alteration) Act 2016 presented a national GST or Goods and administrations Tax in our nation from first July 2017.
Why is GST required?
Tax policies play a vital role in the economy through their impact on both effectiveness and equity. A good tax system should keep in view issues of income distribution and, simultaneously, also endeavor to generate tax revenues to support government expenditure on public services and foundation advancement.
Despite the fact that the nation has proceeded onward the way of tax reforms since the mid-1980s yet there are different issues that should be rebuilt to lift profitability.
Sales of services to consumers are not appropriately taxed with many types of services escaping the tax net. Intermediate purchases of inputs by the business firms do not get full offset and part of non-offset taxes may get added up in prices quoted for exports thus making exporters less competitive in world markets.
One can clarify the effect of GST or Goods and Services Tax with an illustration. For example, A manufacturer or seller sells his products to his customer or buyer including sales tax, and after that, the buyer re-sells those merchandise to another buyer subsequent to charging sales tax again for that same product.
For this situation, while the second person was figuring its sales tax liability, it likewise incorporated the business assets paid on past buy. It is like double tax has been paid on the same product or simply we can say it is a tax on tax. This is the place the requirement for GST emerges to get rid of the marvel.
How to Calculate GST?
Find the percentage amount to be charged and then add that amount to the selling price or the amount. For example: Say GST percentage is 20%. The price of an item for sale is Rs. 500. In this case, need to find 20% of Rs. 500 that is RS. 100.
So, the selling price of that item is 500+100=600.
You may have confusion between CGST and SGST. Here is a question along with the answer to make the point more clear.
Q.Mr. A Manufactures goods. He bought goods for Rs. 1,20,000 and incurred expenses of Rs. 10,000. These manufactured goods were sold for Rs. 145.000. Say, CGST rate 10% & SGST rate 10%. Compute Sale Price.
Intra-state sale Inter-state sale.
Particulars Amount(Rs) Particulars amount
Cost of goods 120000 Cost of goods 120000
10000 Add: expenses 10000
Add: profit(SP – TC) 15000 Add: profit(SP – TC) 15000
sales 145000 sales 145000
SGST @10% 14500 IGST @20% 2900
CGST @10% 14500 Additional tax @1% 1450
sales 174000 sales 175450
Sectors that will get more GST benefit
It is necessary to mention that in the initial stage of the GST bill, all indirect taxes are tot going to be subsumed in GST. Electricity duty, excise duty, and VAT on alcoholic drinks, and petroleum products are not going to be subsumed with GST.
But in some sectors like FMCG, Pharmaceutical, and Automobile), the logistics industry will be the main beneficiary of the GST bill.
While talking about GST benefits it is necessary to mention the names of some other sectors like telecom, banking, financial services, transport, construction, or real estate. In these sectors, the high inflationary impact of GST will be seen.
That’s all about GST and its benefits to society. Some more snippets of data about GST will be published in the next article. Got any more points to add to this GST benefits essay?
Drop them down in the comment section below. Our GuideToExam team will add your points alongside your name in the post. Cheers!