Indian Tax Solution
The Goods and Services Tax is one of the most complex tax systems in the world, the World Bank has said. The international organisation said that GST has the second highest tax rate in the world among 115 countries that have similar indirect tax regimes,Mint reported on Friday.
Forty-nine countries have a single slab of GST while 28 countries use two slabs, the World Bank said. Only five countries, including India, use four non-zero slabs. The others are Italy, Luxembourg, Pakistan and Ghana. India's GST structure has five tax slabs of zero, 5%, 12%, 18% and 28%. The sales and exports of a number of items are zero rated, which allows exporters to claim refund for taxes paid on inputs.
The tax overhaul caused a lot of disruptions, forcing retailers to stock up on inventory. This led to reduced production while growth declined to a three-year low. However, in its recent India development update, the World Bank noted that the "positive impulse expected from India's novel GST system" is likely to increase the domestic flow of goods and services, and "contribute to the formalisation of the economy and sustainably enhance growth".
Huge relief for manufacturers -No GST payments on advances received for supplying goods
On Wednesday, the Central Government spared businesses from paying GST on advance amounts they have received for goods which are to be supplied later in the future. The step was aimed to help clear the confusion over tax liabiliti ...