GST Modality

There are three models namely Central GST, State GST and Dual GST. Dual GST can further be implwmented in two ways - Concurrent GST and Non- Concurrent GST.

1. CENTRAL GST :

Under this option, the two levels of government would combine their levies in the form of a single National GST, with appropriate revenue sharing arrangements among them. The tax could be controlled and administered by the central government.

2. STATE GST :

The second model is to have a state GST in which the states alone levy Tax and the Centre withdraws from the field of GST or VAT completely. In this case, the state GST will work as the redistributing mechanism.

3. DUAL GST

CONCURRENT DUAL GST :

Here the GST will be levied by both tiers of government concurrently. A central level GST will subsume central taxes, such as excise duty, CVD, SAD and service tax; and a state - level GST will subsume VAT octroi, entry taxes, luxury tax, etc. Therefore, under this model, both goods and services would be subject to concurrent taxation by the Centre and the States.

NON-CONCURRENT DUAL GST:

Under this model, while levying the VAT on services, the centre would essentially play the coordinating role needed for the application and monitoring of tax on inter-state services. Within this framework, cascading could be completely eliminated by the states agreeing to allow an input credit for the tax on services levied by the Centre.

Looking to the present tax structure of the country Concurrent GST seems to be the most feasible option. Although the modality is yet to be finalised.

CA Akash Phophalia

Chartered Accountant

(BCOM (HONS), MCOM (FandT), CS, DISA, Certified Indirect Taxation of ICAI)

Office No 203, Amrit Kalash,

Residency Road, Near Bombay Motor Circle

Jodhpur - 342001

Rajasthan

0291-2640225, 9799569294