Page 50 - Banking Finance November 2017

ARTICLE

power prescribed in the Constitution for which they need to raise resources. A GST in Countries Other
Dual GST will, therefore, be in keeping with the Constitutional requirement of
fiscal federalism. than India
Presently there are around 160 coun-
A GST is a consumption based tax, Revenue of State Governments depends on tries which follow GST tax system or
the consumption of Goods & Services within the State. Consequently, some states VAT in some form or other. France was
may have to suffer. With the view to prevent the states from revenue losses, the first country to implement GST to
the Union government has assured that if any government suffers in terms of reduce tax evasion. Similar to Indian
less income generation due to introduction of GST, that portion of revenue loss Context, It is only Canada that has the
will be compensated by Union Government for the period of five years from the Dual GST System. Throughout the
date of implementation of GST Act. world, Rate of GST Ranges between
15-20% generally. It may differ to
Demystifying the Tax Slab: higher/ lower side in few countries.
The rate has been codified in the four-tier tax slab structure under GST regime, Although we do not follow an ideal
which shall cover every product, commodity and service sold or brought in India. GST, we just follow the Indian version
Interestingly, 0% tax rate is also inserted under which essential commodities of of GST which is termed as Indian GST.
everyday use such as Food Grains, Rice, Wheat, etc. are included. This will help
the rural population to a greater extent and help in controlling inflation. There GST as Beneficiary for
is a special rate of 0.25% on rough precious and semi-precious stones and 3% on
gold. common man as well as
Tax Rate Goods Services for government in Long
Nil Essential Commodities Sleeper, Metro Tickets and run:
for everyday use. seasonal passes. An economy of a country can grow only
First 5% Products of mass Railways(AC), Airlines if its people and their business grow and
consumption, sugar, (Economy Class), cab there is an increase in the
tea, Edible Oils, aggregators, Restaurants Government's Revenue in the long run.
Domestic LPG, spices, with less 50 lakh turnover, GST has been introduced to flourish the
etc. etc. morality and to deliver the corruption
Second 12% Processed Food Items, Non AC Restaurants, Airlines free trade throughout the country.
Almonds, Butter, etc. (Business Class), Real Estate, Here, there are some points plotted
etc. which describes the benefits of GST for
all:-
Third 18% Capital Goods, AC Restaurants, Telecom &
Toothpaste, Hair Oil, Financial Services, etc. 1. GST shall ease the way for doing
Soap, Ice Cream, etc. business and will attract the for-
eign capital and foreign investment
Fourth 28% Tier 1: White and 5 Star Hotels, Movie Tickets in the country.
Brown Goods like TV, above Rs. 100, state
2. GST shall reduce the overall trans-
AC, Refrigerators, authorized lotteries, etc.
Soft Drinks, etc. action cost of businesses and that
will affect the business positively.
Tier 2: 28% + 15% cess
- luxury cars, tobacco 3. GST will curb circulation of black
products, pan masala money. This can only happen if
and Aerated Drinks. "Kacha Bill" or temporary bill nor-
mally followed by traders and shop-
However, there are three items which do not fall under the purview of GST, i.e. keepers is put to check. A unified
Alcohol for human consumption, Petroleum products viz. petroleum crude, mo- Tax Regime will lead to less corrup-
tor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel and tion which will indirectly affect the
the last one is Electricity which has been kept aside under the range of GST. common man.

50 | 2017 | NOVEMBER | BANKING FINANCE

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