• Goods and Services Tax (GST) is a multi-stage consumption tax on all Goods and Services
• GST is levied on supply of goods and services on each stage of the supply chain
• GST will replace separate Value Added Taxes (VAT) levied by the Centre (CENVAT) and States (VAT/Sales Tax)
• GST can technically cover 86% of GDP excluding only agriculture sector (14%) as per economic classification • 160 countries have so far implemented GST/VAT
Malaysia implementing GST from April 1, 2015
What are the benefits?
• Common and unified national market
Removal of barriers to trade
Lower cost of doing business
More fair, equitable and transparent
Improved compliance resulting in reduced overall tax rates
• World Bank (India Development Update – Oct 2014)
Delays due to road blocks, tolls and other stoppages will be down by 50% and freight time down by some 20-30%
Logistics costs will be down by 30-40%
Boosting competitiveness of India’s key manufacturing sectors by 3 to 4 percent of net sales
• Impact on GDP (NACER study commissioned by 13th Finance Commission)
GDP can go up by 0.9-1.7% depending on assumptions
Gain in Exports between 3.2-6.3% of GDP
Import gain between 2.4-4.7% of GDP
Goods and Services Tax
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