In India the taxation system is known as Federal Taxation. The Federal Taxation means that both the state and central government has power to collect taxes. There are various kinds of indirect taxes in India like service tax, excise duty, custom duty, sales tax, VAT, CST, entertainment tax etc. We can provide GST implementation in SAP.
First of all we have to know what is an indirect tax. The indirect tax is such tax which can be levied on other person. As example the service tax is paid by the service provider but the same can be collected from the service receiver. Before implementing GST, the state and the central government collect taxes. The sales tax and VAT are collected by the State Government. The service tax and excise duty are collected by the central government. We can write content on GST implementation in Oracle.
What is GST?
GST stands for Goods and Service Tax and it will simplify the indirect taxation in India. After implementing GST, all other indirect taxes will be abolished. There are complication in the calculation of taxes e.g., service tax, VAT etc. They will get reduced. So it will help the common people to understand the process of indirect taxes and calculation. We can help you in GST implementation in Oracle apps.
The details of the calculation and the application of the GST are described below:
Implementation of the Tax
After implementing the GST, all other indirect taxes will be abolished. It will reduce the complexity in the taxes. Only one tax known as GST is charged as an Indirect Tax and the revenue generated from this will be distributed equally among central and state government. We are quite aware of the steps of GST implementation process.
At the implementation stage of GST, some goods price will be increased. On the other hand, there are some reduction in the goods price. Four rates are fixed and the goods are categorized into these four rates. The rates are 5%, 12%, 18% and 28%. We can help you in all GST implementation issues.
The 5% is charged on the daily need products. 12% and 18% is charged on the FMCG products. 28% is charged on the luxury goods. 28% will be 31% for the first 5 years because an extra 3% cess will be charged along with 28%. This additional 3% cess will help to mitigate the deficit if it arises in any state of India. We understand the various GST implementation steps.
Now we need to know the process of calculating the Goods and Service Tax (GST) to get a clear concept. Suppose the goods are manufactured by the manufacturer at a cost of Rs. 100 and the tax rate is 20%. Our experts know the right GST implementation approach.
So if the goods are sold to the distributor, then the selling price will be Rs. 100 + (100*20%) = Rs. 120.
Now the distributed incur additional expenditure of Rs. 30.
Then the total price will be Rs. (120+30) = Rs. 150.
The additional tax i.e. GST will charged on the difference amount i.e. Rs. (150-120) = $30.
The amount of tax will be Rs. (30*20%) = Rs. 6.
So the final selling price of the goods after GST is Rs. (150+6) = Rs. 156.
So the total GST is Rs. 26.
It can be also be cross-checked by the following method.
The total cost of the goods is Rs. (100+30) = Rs. 130. Tax rate 20%. So the total tax is Rs. (130*20%) = Rs. 26.
The final selling price is Rs. 156.
By implementing the GST, the cascading effects get eliminated and the price of the goods is properly priced. So the burden of the taxes are also reduced and the intention of the tax avoidance and tax mismanagement get eliminated. We can help you in writing blog on GST implementation and impact.
At the implementation stage of GST, the price of certain goods will increase significantly because the goods will fall under the tax bracket 28%. They will pay huge amount of tax. You can get a thorough knowledge of the GST implementation advantages and disadvantages.
The luxury goods fall under this rate.
Alcohol and petrol are not in ambit of GST and the taxes on these products are charged separately.
According to GST rules, the regular filling of return is mandatory.
An individual or tax payers should submit 3 monthly returns, quarterly return of each quarter and one annual and final report. The return should be submitted in Form 1 to Form 11. The input credit will also not be available if the return in not submitted within the due date. Our blog can tell you about the recent GST implementation announcement.
So the implantation of GST and they abolish other indirect taxes. It will create an impact on the Indian economy. It is expected that the economy of India will improve through the rise in GDP of the country. We are skilled in pointing out the GST implementation benefits.
At the initial stage, it may face some difficulty associated with implementation. But later on, it will be really effective. It will reduce the price of goods. So the overall economic conditions will be improved in near future through Goods and Service Tax (GST). Our articles can inform you about the GST implementation around the world.