People have taken note of the GST or the Goods Services Tax law. A new law has been proposed which is set to reform how people do business and the way goods and services are taxed in India. Whether it makes goods cheaper for the common man like you and me, nobody can tell. But this is going to impact our lives in our jobs, our businesses and the overall economic environment. Reason enough for us to learn something about it!
Who does it apply to?
What is the GST framework as per the new law?
GST is expected to replace a myriad of indirect taxes such as VAT, customs duty, Excise, CST, Service Tax, Entertainment Tax with a single tax called the Goods and Services Tax.
Will the new GST allow tax cascading benefits?
Many of us are aware that service tax and VAT have cascading benefits, which means you can avail credit of tax paid by you on inputs. For example in case of service tax – you levy service tax on services you sell and while depositing this tax you can take credit of service tax paid by you on services used as inputs. This cascading benefit shall also be available in case of GST.
Here is how set off works in case of GST
IGST payments can be set off against – IGST, CGST, SGST on inputs CGST payments can be set off against – IGST and CGST on inputs SGST payments can be set off against – IGST and SGST on inputs Hope our readers will find this information about GST useful. We will bring more details on the draft law which is under discussion and has not been approved yet, so you can better understand its impact on your business. To read the entire GST Bill draft, click here.
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