1.What is the Good & Services Tax (GST)?
- Goods and Services Tax (GST) is a location based consumption tax on goods and services.
- GST works on the concept of “One Nation One Tax”. This is one of the biggest tax reforms in India since Independence and is proposed to be implemented from 1st July 2017.
- Both, Centre and State to levy taxes on goods and services
- GST expected to replace the existing tax structure which is plagued with multiplicity of Central and State taxes
2.What are benefits of GST?
- GST is considered a progressive system of taxation; it will bring Indian taxation system in parity with the system existent in the developed countries.
- Seamless credit across entire supply chain and across all the States / Union Territories.
- Implementation of GST is expected to substantially reduce costs especially in the manufacturing sector. The benefits of which could cascade into other sectors in the long run.
- It is also anticipated to bring in more transparency, automation and simplification in tax compliance.
3.If I pay advance premium before 1st of July, will I get an exemption under GST for current premium?
- If you are paying the premium for a policy for which premium is overdue or due for payment till 30th June 2017, then GST will not be applicable to you.
- If your policy premium is due for payment on or after 1st July 2017, which is the proposed implementation date for GST, then GST will be applicable on your premium.
- In case you pay the premium in advance, the balance amount due if any, on account of GST will have to be paid after the GST implementation date.
4.Will both Service Tax & GST be charged on Insurance premiums?
No, form 1st July 2017, only GST will be charged at the prescribed rates.
5.What type of GST is proposed to be implemented?
It would be a dual GST with the Centre and States simultaneously levying it on a common tax base. The GST to be levied by the Centre on intra-State supply of goods and / or services would be called the Central GST (CGST) and that to be levied by the States would be called the State GST (SGST). Similarly Integrated GST (IGST) will be levied and administered by Centre on every inter-state supply of goods and services.
CGST: Central GST to be levied by the Centre on intra-State supply of goods and / or services
SGST: State GST to be levied by the State on intra-State supply of goods and / or services
UTGST: Union Territory GST to be levied on intra-UT supply of goods and /or services.
IGST: Integrated GST will be levied and administered by Centre on every inter-state supply of goods and services.