Cascading effect of the Taxes under GST regime
The following points need urgent attention of GST Council:
Under GST,
i. IGST paid by any dealer is not going to be set off with SGST and CGST payable
ii. Moreover there is no clarity about set off of SGST paid in one State with SGST paid in another State.
iii. Suppose a dealer is purchasing from Out of State and paying ISGT and if he is selling only in his state of registration again he has to pay SGST for which IGST set off is not allowed.
This will result in cascading effect, and the dealers' tax liability is burdened. more
Under GST,
i. IGST paid by any dealer is not going to be set off with SGST and CGST payable
ii. Moreover there is no clarity about set off of SGST paid in one State with SGST paid in another State.
iii. Suppose a dealer is purchasing from Out of State and paying ISGT and if he is selling only in his state of registration again he has to pay SGST for which IGST set off is not allowed.
This will result in cascading effect, and the dealers' tax liability is burdened. more
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As per FAQ-2 issued by Govt.: What is the implication of different definition of “input tax” in three acts like CGST, SGST and IGST Acts? It implies that input tax consists of IGST & CGST in CGST Act and IGST & SGST in SGST Act. In the IGST Act, input tax consists of all three taxes namely, IGST, CGST and SGST. Input Credit Can be set of against: IGST, CGST and SGST IGST IGST & CGST CGST IGST & SGST SGST It further implies that credit of all three can be used for discharging IGST liability, whereas only credit of IGST & CGST can be taken in CGST Act and that of IGST & SGST can be taken under SGST Act. Further the credit of CGST & SGST cannot be cross-utilized. Note: Here it is specifically denied set off of CGST against SGST and silent about set off of SGST of one state with SGST of another state. These will definitely result in cascading effect and result in disadvantage to dealers. more
Jul 03
It leads to cascading effect and dual taxation on the same item. Government should evolve a mechanism to maintain inter state accounts and settle them if any deficit is there on that account. But dealers should not suffer and the Govt. should allow any amount paid towards IGST , CGST and SGST of all states without any restrictions among them, as it will defeat the purpose for which GST is enacted. more
Jul 01
It is already there. The point raised above is on account of lack of knowledge on the subject. Such misinformation is being spread by those opposed to this tax system. more
Jul 02
IGST can be set off against IGST, CGST, SGST in that order. Set off of taxes paid in one state not available with taxes paid in other states. more
Jul 01
