India’S New Gst Slabs Has Provider Companies Worried

Since service providers will get tax input credits, he said, the effective tax rate will be lower.
“For service providers, it is going to get troublesome,” said Saloni Roy, a senior director at tax consultancy Deloitte Haskins & Sells LLP.
The Goods and Services Tax (GST), set to be launched from July 1, will have rates of 5, 12, 18 and 28 percent for services, in line with those applying to goods.
The biggest argument in favour of the GST – India’s biggest tax overhaul since independence in 1947 – is that it would make it easier to do business by simplifying the tax structure and compliance.
While it will make lives easier for manufacturers and traders as “cascading” taxes on top of taxes through the production process would be done away with, compliance for service providers would become onerous.

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