GST basics: 7 misconceptions cleared
The rumour mills have long past on an overdrive mode for the reason that launch of GST.
here’s a fact take a look at by ET Wealth for each GST supporters and its detractors.
Now it’s one nation one tax
fantasy : given that GST will exchange all other taxes on all items and services, we're in a single tax regime.
truth : although this was once the original thought, petroleum merchandise—petrol, diesel—are nonetheless outdoor GST’s ambit and, due to this fact, their tax rates fluctuate significantly throughout states.
as an instance, petrol remains to be offered in Mumbai at Rs 74.30 per litre (as on 5 July) compared to Rs 63.12 in New Delhi. similarly, another objects, reminiscent of liquor, have additionally bee kept out of GST for now.
Small companies will endure
fantasy : The lifetime of small businessmen will turn out to be troublesome beneath GST on account of computerised billing, need for web connectivity.
truth : retail outlets can do guide billing under GST and internet connectivity is required simplest at the time of filing month-to-month return and can also be managed from a cyber cafe.
prices will shoot up
myth : personal expenses will go up as a result of GST making it inflationary as a result of tax charges have been mounted at greater levels—18%, 28%.
fact : although the GST charges seem high, it is only since the whole tax is now seen to the patron. earlier most taxes—significant and state excise, extra excise, purchase tax, and many others.—didn't mirror for your invoice. If one provides up all the taxes, it could had been more for most objects (ie effective tax charges might be decrease for many merchandise).
for instance, the fee of chicken dish in Kerala should fall as a result of there used to be a 14.5% tax on reside hen previous, which has come down to zero now below GST.
No tax instead of GST is now a reality
delusion : for every just right or provider that has been introduced underneath GST, there won’t be any further tax.
reality : GST only subsumes significant and state taxes and the levies charged by way of local bodies are nonetheless out of doors its ambit. the use of this loophole, the Tamil Nadu government has allowed its local our bodies to cost 30% tax on film tickets over and above GST. GST is eighteen% for film tickets up to Rs one hundred and 28% for tickets that cost greater than Rs 100.
but as a result of local body levies, tax in Tamil Nadu might be 48% for tickets up to Rs 100 and 58% for tickets that cost extra. now not enormously, the cinema hall owners within the state went on strike. “motion of the Tamil Nadu executive is against the spirit of the GST and the GST council should take action in opposition to it,” says Amit Sarkar, partner and Head, indirect Taxes, BDO India.
financial boom will rise
delusion : GST will push up the industrial boom.
fact : real economic growth comes from each organised and unorganised sectors. Tax evasion turns into troublesome in GST, so value benefit of unorganised sector goes and this may increasingly lead to some companies transferring to the organised sector. So, what happens will not be an in elevate in ‘real’ economic boom but a rise in ‘recorded’ economic boom. on the other hand, there might be a small uptick in ‘actual’ economic increase because of the development in the ease of doing industry.
Pay GST twice for card funds
fantasy : GST will probably be charged twice, if you're making payments by means of credit card.
fact : there's no further GST for bank card funds and the confusion arose best because there's GST on additional charges—comfort prices—levied by firms. as an example, you're making a Rs 10,000 cost and an organization prices Rs 50 as comfort charge for helping you make the payment by means of the bank card, it's a must to pay 18% GST on that charge too—previous you paid a 15% tax on it. So the three% raise is very small—just Rs 1.5 on Rs 50.
Please visit our site at :
Contact us :8818888127
Comments
Post a Comment