India made the biggest history in 1st July 2017. GST had applied in India. It was the biggest achievement for the present government.
GST is the not only the change in the tax system but also in the biggest change in the federal system of India. In this page, we will compare the taxes system of various countries. We will also discuss how GST will affect taxes revenue in States.
Will GST effect positive in your State
Before GST in India, there were many indirect taxes. So different agencies were involved in collecting taxes, which was costly. But now all these taxes have subsumed under GST. So the cost of collecting taxes is come down.
In various countries, GST applied and affecting positively to the taxation system of the countries. There will be two different taxes first state GST (SGST) and Central GST (CGST).
In the Australia GST system applied by central government, administers and total revenue is shared between the Centre and the States.
Take an example of Canada, in Canada the a Value added tax that is called VAT is administered by the Central Canada Revenue Agency. But one state, Quebec, imposes its own state level taxes.
Another example is of USA, in the USA every state takes different sales tax and there is no revenue sharing in the states.
The one effect of GST is that individual states will not be able to change their tax rates. The tax rates will be decided by the GST council. GST council has represented by all states and Centre.
So the big discussion points are that whether the state governments revenue post implementation of GST will increase or decrease.
What will be effective rates in states it will totally depend on GST rates applied in states. The GST Council has decided to go for multiple tax rates. There will be five different tax rates that is 0 %, 5%, 12 %, 18% and 28%.