GST

GST WORKSHOP FOR EXPORTERS

Goods and Service Tax aka GST initiated from the midnight of 8th November onwards is considered to be the biggest post-independence tax/economic reform in India. This would not only affect businesses but also to the common man. GST expresses the principle of “One Nation, One Market, One Tax” country. Also, it has converted India into a unified market of 1.3 billion citizens and 2.4 trillion USD market into a common market of the nation. The main concept behind the implementation of GST is to offer a ‘Win-Win’ situation for everyone i.e. manufactures and traders will have to deal with fewer tax fillings, consumers would be paying less for the goods and services and the government will generate more revenues as leaks would be plugged because of GST.

India is going through a lot of changes right now first the demonetization to eradicate corruption and then a few months later the goods and service tax bill which is to be levied at every point of sale. Every product goes through various stages before it reaches the final customer. The various stages are buying of raw materials, manufacturing or production, warehousing or selling it to the wholesaler, selling it to the retailer and then the product reaches its final customer through the retailer. Now the goods and service tax will be levied on all these stages a product goes through, to make sure there would be no space for reasons of corruption which will directly boost our country’s economy.

To understand this The Chamber of Marathwada Industries and Agriculture (CMIA) along with Federation of Indian Export Organisation (FIEO) will jointly hold a day-long training session on newly introduced Goods and Sales Tax (GST) for exporters and related stakeholders on Friday. Different aspects related to the GST such as its core meaning, exports in the light of new tax regime, zero-rated supply, claims for different refunds, tax calculation and different documentation required under the new tax are scheduled to get covered during the training session.

However, the implementation of GST has so far been proven advantageous to the common man as there are lots of opportunities for savings on GST. The personal care items such as oil, soap, kajal, tissues have come down by 6% to 10%. Taxes on hotels have come down by 22% to 18%. Air traveling has become cheaper as it attracts only 5% of GST. The GST on branded items has been reduced from 23% to 18% which means that the common man can afford branded items at a very reasonable rate. On the other hand, the cost of agreement may be higher for small-scale manufactures and traders which would directly result in the increment of the rates of that product or item. But if we talk about the long-term view, it seems that GST won’t be only reducing tax rates but also the tax slabs which are currently present in the system. It is also said that because of GST implementation, exports would grow and because of which, Foreign Direct Investment would directly get affected in a positive way. Not only FDI but also the GDP of the nation would increase if seen in a long-term view. Inflation, tax avoidance etc would also be reduced because of GST. It is known in a good sense for enhancing the business and making it smooth when compared to an earlier situation. There has however been a controversy on the GST that is applied on the sanitary napkins in India. Currently, there is 12% GST on sanitary napkins which is more or less same than the previous GST which was 13.5%. People demand the rates be lowered as menstruation is not by choice and using sanitary napkins is not a luxury it is a need. There are around 70% of women who yet cannot afford to use sanitary napkins and yet the 12% GST on the sanitary napkins put the health and Hygiene of the women of our country in danger. The say of the government on this issue is that the total tax on the raw materials needed for the production of the sanitary pads adds up to 18% of the total GST yet it charges only 12% on the napkins. There is a tax inversion by charging 12% against sanitary napkins and if this rate was further lowered it would further increase the tax inversion.

"The GST is the most talked about concept today for the entire nation. Once the regime under new tax stabilizes, the ease of doing business would be realized. Therefore, making exporters aware of the path-breaking reform can help in reaping desired fruits in the longer run," a CMIA official said.

The workshop training for the exporters teaching them the significance, effects, measures to be undertaken etc. will be held at the conference hall of CMIA at Bajaj Bhawan, MIDC Railway Station Aurangabad from 10 am. The organizers have appealed all stakeholders to take benefit of the initiative.

Stating that exporters were concerned that the GST would dent liquidity in a big way and the compliance cost of exports may go up, the CMIA said that the objective of the training was to educate stakeholders about changes in provisions and procedures of exports under the new tax regime.