Financial services (1)

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Financial Services
India has a diversified financial sector
undergoing rapid expansion, both in terms of
strong growth of existing financial services
firms and new entities entering the market. The
sector comprises commercial banks, insurance
companies, non-banking financial companies,
co-operatives, pension funds, mutual funds and
other smaller financial entities.
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Service Tax
Service tax is a tax levied by the government on
service providers on certain service
transactions, but is actually borne by the
customers.
Service tax is a tax levied by the central
government and you have to pay this for certain
services. It is the end user who pays this tax.
In June, the government had increased the service
tax rate to 14 (inclusive of all cess) from
12.36 earlier, making services more expensive
for the end user.
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What is GST
Goods and Services Tax (in short GST) is by far
one of the most awaited tax reforms in the
country. With the emerging consensus amongst the
political parties and the push voiced by the
industry, there is a lot of expectation that the
Constitutional Amendment Bill will be passed in
this Monsoon Session. If this happens, the
Government is likely to push the implementation
of GST with effect from 1st April 2017.
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As the name suggests, Goods and Services tax is a
tax levied when a consumer buys a good or
service. It is meant to be a single,
comprehensive tax that will subsume all the other
smaller indirect taxes on consumption like
service tax, etc. This is how it is done in most
developed countries.
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Implications of GST
GST tax will have a far reaching impact on almost
all the aspects of the business operations in the
country, for instance, pricing of products and
services supply chain optimization IT,
accounting and tax compliance systems.
Implications of GST will be a game changing
reform for Indian economy by developing a common
Indian market and reducing the cascading effect
of tax on the cost of goods and services. It will
impact the Tax Structure, Tax Incidence, Tax
Computation, Tax Payment, Compliance, Credit
Utilization and Reporting leading to a complete
overhaul of the current indirect tax system.
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GST Impact
GST tax rate will turn India into one common
market, leading to greater ease of doing business
and big savings in logistics costs from companies
across all sectors. Some companies will gain more
as the GST rate will be lower than the current
tax rates they pay, others will lose as the rate
will be higher than the present effective rate.
While the rate of GST is yet to be decided,
industry observers have assumed an 18 rate
recommended by a government panel in making their
impact calculations. 
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Financial services
The GST tax rate is based on the destination
based consumption principle. It means that the
GST liability would finally accrue at the point
where the goods were supplied to or where the
service was consumed. This means the final
customer will pay the GST. The very concept would
not find easy acceptance with the people. A lot
of education and learning has to be propagated
for the people to understand the implications.
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GST Registration
Find out who is required to register for GST and
learn about special types of registration. You
need to GST Registration if you carry out a
taxable activity. As a business owner, it's your
responsibility to register for GST.
If youre registered for GST, your invoice must
be a tax invoice. Tax invoices are different to
regular invoices as they include the GST amount
for each item along with some extra details. Tax
invoices must be formatted correctly for you to
be able to claim you full tax entitlements.
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