A Comparative View On Goods And Services Tax

August 26, 2018

Before going on discussion we ought to establish GST and the Objective behind it.

What’s GST?

GST is a tax on products and services with continuous and comprehensive chain of set-off advantages from the Producer’s stage and Service provider’s point upto the retailer level. It is essentially a tax just on value addition at every stage and a supplier at every point is allowed to set-off via a tax credit mechanism. Under GST construction, all different stages of production and distribution can be interpreted as a mere tax pass and the taxation essentially sticks on final consumption within the taxing jurisdiction.

Objective behind GST

A) The prevalence of taxation simply drops on national consumption. B ) The efficiency and equity of the system is optimized. C) There should be no export of taxes across taxing jurisdictions. D) The Indian marketplace ought to be integrated into a single common market. E) It enriches the reason for co-operative federalism.

Our comparative discussion will be based only on important points constructing overall GST.


A dual structure was recommended by the EC. The two components are: Central GST (CGST) to be imposed by the middle and state GST (SGST) from the nations. The Task Force has also suggested for the dual levy imposed concurrently by the centre and the nations, but independently to market co-operative federalism. Both the CGST and SGST ought to be imposed on a shared and indistinguishable base.

Both have suggested for ingestion type GST, which is, there should not be a differentiation between raw materials and capital goods in permitting input tax credit. The tax base should comprehensively extend over all services and goods upto final consumption point.

Also both are of the opinion that the GST ought to be structured on the destination principle. According to Task Force this will lead to the shift from production to consumption where imports will be liable to both CGST and SGST and exports must be relieved of the burden of goods and services tax by zero rating. Consequently, Chartered accountant will accrue to the state where the consumption occurs or is deemed to take place.

The Task Force on GST stated the computation of CGST and SGST accountability ought to be based on the Invoice charge technique. This will ease elimination of this cascading impact at various stages of production and supply.