Page 5 - MSME April-May 2017
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Feature Preparedness for GST (Goods and Services Tax) in the Ministry of MSME The introduction of Goods and Services Tax (GST) would be a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of central and State taxes into a single tax, it would mitigate cascading or double taxation in a major way and pave the way for a common national market. he GST Act came into effect on 8 (ii) Will prevent cascading of taxes as Input Tax th September, 2016 vide 101 Amendment to Credit will be available across goods and st Tthe Constitution of India. Hence, all existing services at every stage of supply; Central Excise and Service Tax assessees will be migrated to GST starting 7 January, 2017. The GST (iii) Harmonization of laws, procedures and th st will officially come into force on 1 July, 2017. rates of tax; The introduction of Goods and Services Tax (iv) It will boost export and manufacturing (GST) would be a very significant step in the field activity, generate more employment and of indirect tax reforms in India. By amalgamating thus increase GDP with gainful employment a large number of Central and State taxes into a leading to substantive economic growth; single tax, it would mitigate cascading or double (v) Ultimately it will help in poverty eradication taxation in a major way and pave the way for a by generating more employment and more common national market. financial resources; A Goods and Services Tax Council (GSTC) has (vi) More efficient neutralization of taxes been constituted comprising the Union Finance especially for exports thereby making Minister, the Minister of State (Revenue) and the our products more competitive in the State Finance Ministers to recommend on the international market and give boost to Indian GST rate, exemption and thresholds, taxes to be Exports; subsumed and other features. This mechanism would ensure some degree of harmonization on (vii) Improve the overall investment climate in different aspects of GST between the Centre and the country which will naturally benefit the the States as well as across States. development in the states; Benefits of GST (viii) Uniform SGST and IGST rates will reduce the incentive for evasion by eliminating rate (A) Make in India arbitrage between neighboring States and that between intra and inter-state sales; (i) Will help to create a unified common national market for India, giving a boost (ix) Average tax burden on companies is to Foreign investment and “Make in India” likely to come down which is expected to campaign; reduce prices and lower prices mean more April-May, 2017 3
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