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Essay writing---Goods and Services Tax - India


The Goods and Services Tax (GST) is a value added tax to be implemented in India [1] Not decided.[2] It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. It is aimed at being comprehensive for most goods and services with few tax exemption.
India is a federal republic, and the GST will thus be implemented concurrently by the central and state governments as the Central GST and the State GST respectively.[3]Exports will be zero-rated and imports will be levied the same taxes as domestic goods and services adhering to the destination principle

The advent of GST

GST will bring about a change on the tax firmament by redistributing the burden of taxation equitably between manufacturing and services. It will lower the tax rate by broadening the tax base and minimising exemptions. It will reduce distortions by completely switching to the destination principle. It will foster a common market across the country and reduce compliance costs. It will facilitate investment decisions being made on purely economic concerns, independent of tax considerations. It will promote exports. GST will also promote employment. Most importantly, it will spur growth. The chart below pictorially represents the movement of goods after GST.
  • Taxes which cannot be set off will reduce
  • All India tax will be based on value added
  • No value added implies no tax to be paid to the government
  • Creation of a tax neutral supply chain.
  • You follow any route; the tax given to the government will remain the same.
  • Entry tax, Octroi etc. Will be there, but as is evident, these are also being slowly removed. This will make the supply chain perfectly neutral to taxes
  • Efficiency of SCM will depend on the cost minimization of the following costs.
Logistics cost
  • Carrying and forwarding agency costs
  • Ware house fixed and variable costs
  • Depot fixed and variable costs
The selection should be based on the following trades off which must be taken into consideration while designing the supply chain.
  • Meshed design Vs Hub and spoke Vs combination
  • Ware house capacity and depot capacity
  • No of ware houses and no of depots
  • Mode of transport on road(9 ton Vs 15 ton Vs 20 ton) and rail ( Half rake, full rake, 2point rake)
  • Replacement cycle
  • Safety stock
  • Milk runs

1 comment:

  1. Interesting article. I think, sometimes, people are afraid to answer the questions that are put to them. Or they try to out-think the person asking them.
    Essay Writing


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