Good and services tax (GST) needs no introduction, we all are well mindful of the same and we are paying the tax as well but still general public is not very much clear about it.As there is a layer of fog on the spectacle amongst people. If you also keep coming up with a question like what GST means for banks and financial services, then you are at the right stop. As here, you will get to know about it in the simplest of terms so that you can use it in the right way and get its right implications practically.
Before we take up things in terms of banks and finance here it is important to know about the GST, what all it entails so let us quickly see what exactly goods and service tax is all about.
What is GST?
Good and service tax, which is also known as (GST) an indirect tax that was introduced on 1 July 2017, it is a single tax system, that is applicable in all the states of the country. The best part is that that it has replaced all the other tax levied by the central and state government, which is now replaced, by one tax that is GST.
Initial market disrupt was bound to happen which was seen in that quarter, which later become normal and market is now again is back to track. One of the most important sectors is banking and finance therefore; it turns out to be vital to be cognizant of the changes for both the customer and the service provider as well. It is the biggest reform in the country after the independence, so it is going to have far and deep-seated impact on the economy of the country.
It is understood that we pay services that we avail from the banks, insurance companies, mutual funds and so on. As we all are well aware of the fact that service tax is an indirect tax and the Central board of Excise and Customs (CBEC) is in authority for the formulation of the policies and everything that comes under the parchment of services taxes. As we, all know, service tax is levied at the rate of 15 % on most of the services. Under the GST bracket, it will be 18% of the tax that you will be paying for the different services. It is certainly not possible to summarise the minute details in this piece of write up, thus you the best is to seek professional help so that you get the right information. The Goods and Service Tax for real estate is reduced to great extent. But there exist the dual model of taxes for this sector including Central GST and State GST. However, it proves to be helpful for the construction and operation of buildings but how far it is going to be helpful for buyers is still not clear.
Thus, the clear fact to avail all the financial services in India we have to pay marginally higher after the introduction of GST. Though the taxation to avail the services is not fixed it varies depending on the services or goods. For an instance if we want to generalise all we know is they fall under the category of 18% tax bracket.