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TMI BlogPart B- First Discussion Paper on GST- 1st SegmentX X X X Extracts X X X X X X X X Extracts X X X X ..... Part B- First Discussion Paper on GST- 1st Segment - By: - Deepak Aggarwal - Goods and Services Tax - GST - Dated:- 6-2-2015 - - GST Goods and Services Tax Part-B First Discussion Paper on GST- 1 st Segment First Segment of First Discussion Paper on GST explains a brief reference to the process of introduction of VAT in the Centre and in the States and also areas where needs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further improvements i.e. justification for GST. Introduction of VAT In India, VAT was introduced at the Central level for a selected number of commodities in terms of MODVAT w.e.f March, 1986 and later it is extended to all commodities in terms of CENVAT w.e.f. 2002-03. Later on Service tax was added to CENVAT w.e.f. 2004-05. Vat was introduced at the State level beginning fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om April, 2005. Before introduction of VAT - at Central level, there was a burden of multiple taxation i.e. tax on tax. No Input tax credit was allowed in earlier regime. -at State level, in case of multi point sales taxation, burden of sales tax paid on purchase on each level was also added and thus a cascading effect of taxation was there. Also no input credit was allowed in earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regime. After introduction of VAT -at Central level, a set-off is given i.e. input tax credit introduced. -at State level, a set-off is given for input tax paid and also for tax paid on previous purchases to remove cascading effect of taxation. Justification of GST Current system of VAT at Central and State level have some shortcomings. Shortcomings- at Central level ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Non-inclusion of several Central taxes e.g. additional customs duty, surcharges etc. - Non-inclusion of value added chain in the distribution trade below the manufacturing level Shortcomings- at State level - Non - inclusion of several state taxes e.g. luxury tax, entertainment tax etc. -Cascading effect on account of Cenvat element i.e. excise duty on the goods remains in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded in the value of goods to be taxed under state VAT - No credit of input services at state level After introduction of GST, all shortcomings at Central and State level will be removed. At Central level -GST will provide comprehensively more indirect central taxes -Integrate goods and service taxes for the purpose of set-off relief -Widening of dealer base by captur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the value addition in distributive trade At State level -Removal of cascading effects of CENVAT i.e. excise duty -Removal of cascading effects of Service tax Thus GST is not simply VAT plus Service tax. It is an improvement over the previous system of VAT and Service tax. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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