A Comparative View On Goods And Services Tax

This contrast is based on the recommendations of the First Discussion Paper produced by the Empowered committee of states finance ministers (hereafter called EC) and the Report of the Task Force on GST constituted by the Thirteenth Finance commission.

Before going on discussion we ought to define GST and the Goal supporting it.

What’s GST?

GST is a tax on goods and services with comprehensive and continuous chain of set-off benefits from the Producer’s point and Service provider’s point upto the retailer level. It’s essentially a tax only on value addition at every stage and a provider at every stage is allowed to set-off through a tax credit mechanism. Under GST structure, all different stages of production and distribution can be interpreted as a mere tax pass and the tax basically sticks on final consumption within the taxing jurisdiction.

Objective behind GST

A) The incidence of taxation only falls on national consumption. B) The equity and efficiency of the system is already optimized. C ) There should be no export of taxation across taxing authorities. GST Tax chennai ) The Indian market should be incorporated into a single common market. E) It enhances the reason for co-operative federalism.

Our comparative discussion is going to be based only on significant points constructing overall GST.


A dual structure was advocated by the EC. The two components are: Central GST (CGST) to be imposed by the center and state GST (SGST) from the nations. The Task Force has also suggested for the double levy imposed concurrently by the middle and the nations, but independently to promote co-operative federalism. Both the CGST and SGST ought to be imposed on a shared and indistinguishable base.

Both have suggested for consumption type GST, that is, there should not be a differentiation between raw materials and capital goods in permitting input . The tax base should comprehensively extend over all services and goods upto final consumption stage.

Also both are of the view that the GST should be structured on the destination principle. According to Task Force this will result in the change from production to consumption where imports will probably be responsible to both CGST and SGST and exports must be relieved of the burden of products and services tax by no evaluation. Consequently, revenues will accrue to the state where the consumption takes place or is deemed to take place.

I.e., allow credit for tax paid on all intermediate products and services on the basis of invoices issued from the provider. This will ease elimination of this cascading impact at various stages of manufacturing and supply.