Economy, asked by murali24, 1 year ago

what is usfull gst india

Answers

Answered by srujan3
1
An important benefit of the introduction of GST will be the removal of the cascading tax effect. In simple words, “cascading tax effect” means a tax on tax.

Under the current regime, the service tax paid on input services cannot be set off against output VAT. Under GST, the input tax credit can be availed smoothly across the spectrum of goods and services, thus reducing the tax burden on the end user and removing cascading effect.

Let’s take the following example to understand how removing the cascading effect will reduce taxes.

Current scenario

A trader buys office supplies for Rs. 20,000 paying 5% as tax. It charges 15% service tax on services of Rs. 50,000. Currently, he has to pay Rs. 50,000*15% = Rs. 7,500 without getting any deduction of Rs. 1,000 VAT already paid on stationery.

Under GST (assuming GST= 18%)

GST on service of Rs. 50,000 @18%9,000Less: GST on office supplies (20,000*18%)3,600Net GST to pay5,400

This will be especially beneficial to industries that involve both goods and services (like restaurant business) and pay both VAT & Service Tax under the current regime.

Answered by Justyvimal
0
Many products came to a crash and thrash and cut dowb the rate
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