Indian tax department has recently finalized the third stage of GST bill which is dealing with 1211 items has been introduced to improve the ease of doing business in India. The new shape of GST bill is effectively making food grains cheaper while exempting essential items such as milk and cereals from the levy altogether. It fits forty-three percent of the items in the eighteen percent tax slabs. The highest slab which is the twenty-eight percent tax slab includes nineteen percent of all goods. And of course, the lower slab of the GST, the five percent slab, includes more products than the twenty-eight percent tax slab. Well, it includes fourteen percent of the affected products. The zero-percent slab, however, includes seven percent of the products. There is a twelve percent slab as well; it includes seventeen percent items.
1. GST for Centre
2. GST for States
3. GST for Union Territories
4. GST for inter-state movements
Goods and Services Tax is the most ambitious tax reform India has ever taken. India, till date, has passed four GST bills. The deadline for GST implementation is 1st July. The aim of this bill is to replace multiple taxes and levies with a single nation-wide value-added tax. However, it has four different aspects which are helpful for small manufacturing business. It will eliminate the extortion at borders that is popularly known as hafta. Nevertheless, the massive tax overhaul will be the other benefit of this bill.
1. Reduce tax evasion
2. Improve the ease of doing business
3. Speed up the GDP growth
4. Eliminate the extortion at borders
5. Boost in manufacturing business
6. Massive tax overhaul
Our Finance Minister Mr. Arun Jaitley has mentioned that the GST bill will ensure free movement of goods across the country. So, it will bring immense flexibility for the manufacturing business in India. If you are in manufacturing business, this bill is going to make your way easier. The extent to which manufacturers will gain from the consolidation of taxes under GST will depend on the complexity of their product. If you are manufacturing and supplying steel bars, you are more likely to gain less than a horn manufacturer. However, the manpower suppliers are subjected to give a higher discount than a transportation service provider. Once the bill takes place, the manufacturing scenario in the country will immensely change. Yes, the manufacturing businesses will get more input credit as about a dozen parallel taxes of states and the center will be subsumed in it. In case, you are associated with a small business of automobile manufacturing, you may not be able to claim credit for the state VAT. But yes, the soap manufacturers are expectant to face a tax burden after the new bill is implemented. Anyone suggesting that the GST should not be implemented here is not keeping the interests of the state and the common people in mind. In this regard, we would like to tell, you are going to make your products more costly if you are not implementing this Goods and Services Tax bill. The GST is expected to give an upward push to the overall segment of manufacturing.