According to Wikipedia GST definition is “Goods and Services Tax” would be a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India, to replace taxes levied by the Central and State governments. Goods and services tax would be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method. This method allows GST-registered businesses to claim tax credit to the value of GST they paid on purchase of goods or services as part of their normal commercial activity. Taxable goods and services are not distinguished from one another and are taxed at a single rate in a supply chain till the goods or services reach the consumer. Administrative responsibility would generally rest with a single authority to levy tax on goods and services. Exports would be zero-rated and imports would be levied the same taxes as domestic goods and services adhering to the destination principle.
DQ Week look into what IT partners have to say about GST bill.
Rushabh Shah, President, TAIT said “Total tax on software is 15% service tax and 5.5% vat totaling about 21.24% on base rate. This will come down to 18% GST. Software is taxed twice as service tax and VAT. Now it will be single tax. We feel that GST will simplify compliance and will free up resources to concentrate on business expansion. Though, implementation will be done only after things are in place, companies need to start planning for future.”
However, GST bill has positive side there are some loopholes as well says Sanjeev Pathare, President, Computer and Media Dealer Association, Pune. “There will be price parity and advantage is, everyone can sell across India on one rate and business operation will be easier. But if the rate is higher i.e 18 to 20 percent then that will be taxing to our industry. Secondly, there should be strict rules for credit setoff, unless we will suffer a huge loss.
While some are waiting GST to be implemented, A.S. Vidyarthy, President, JCTA, Jamshedpur expressed “It will be too early, let the GST be implemented first, then we’ll be able to analyze the results. It is expected that it will better the situation, market will also stabilized. Right now the challenge is infiltration from other markets, price difference in Online and offline, I think both the factors will come under control.