2.7 Principle of GST Before starting the elaboration of how does GST work it is crucial to know some certain terms and definitions. The terms and definitions will provide the reader a clearer picture what is going on and have a better idea on the subject of GST. The terms and definitions are listed as below: 2.7.1 Taxable Supply Taxable supply is referring to the business transaction which are subject to GST. On the other words, Where GST is imposed on a business transaction, such transaction is called as taxable supply. 2.7.2 Consideration In making the taxable supply you will get something in return, which may be in the form of money or other than money. 2.7.3 Taxable turnover The value of the total taxable supply 2.7.4 Standard Rated …show more content…
Business transactions which are subject to GST are called taxable supplies. Businesses making taxable supplies are required to register under GST if the annual sales turnover has exceeded the prescribed threshold. There is an important clue in this tax paying process which is only a registered person can charge and collect GST on the taxable supplies of goods and services made by the producers. GST is charged subjected to the goods or services sold. Once you are registered for GST, GST must be charged whenever you make taxable supplies. When you are producing a goods or service, you will have to acquire input. These inputs will be imposed with GST as well. If these inputs materials were bought from a GST registered person, you will be charged GST on your purchases. Other than input, output works in the same way. It shows that GST must be imposed on the output when you are trying to sell your goods or services. Hence, if your sale price of your goods or services included GST, the amount of the GST to account is based on this formula: 6% / (100%+6%). When you submit your GST returns, according to the taxable period, you need to offset your input tax from output tax. In short, it can be formulated as this
Taxation is a system that the government uses to gain money, they gain this money to support the government and provide public services. The government may secure their profits without taxation from natural resources, products, or services. (Taxation 1)
Income Taxes: Monies generated from sales or services rendered are considered normal personal income to the owner and as such, are only taxed once, but are often subject to the highest rate of taxation.
Since fresh food, water, sewerage and drainage service are in big equity aspect, the rest of them are in the small aspect. This is because if the GST exemption removed, the fresh food price will raise, in which ignite regressive consequences. It will first reduce the real disposal income of fresh food producer, and then elastically deflect the purchasing power of low-income earners. Furthermore, the market will record a dead weight loss in economic term as a whole, which is a significant drawback to economy due to extending GST on fresh food
It is troublesome to make a proficient tax administration without an overall instructed and generally prepared staff, when cash needs to pay great wages to tax authorities and to modernize the operation, and when taxpayers have restricted capacity...
Bhalla started with a grocery shop. Any income arises from any business or any profession is chargeable to tax under the head of “Profit and Gains from Business and Profession”.
Taxes have always been the traditional sources of government revenues. Recourse to taxation to finance the operational costs of government has been availed of by rulers of all times and climes from antiquity down to the present. It is what the government uses for community development.
Taxes on property and capital transactions: levied on specific forms of wealth and its transfers such as estate duty, wealth tax, house tax, land revenue and stamps and registration fees, etc.
(1) Factors of Production The factors of production are the inputs in any production process. The completed goods are what result from the process, also often called raw and finished goods. The more factors of production are given as input, the higher the number of completed goods will be, and of course the opposite is just as true. The typical factors of production are land, labor and capital goods.
The Goods and Services Tax, or GST for short, is defined as the multi-staged tax consumption on goods and services (GST, 2015). It is the tax that is only charged on the supply of goods and services made in the course of running a business locally by a registered, or taxable, person (Boey, 2015). Replacing a country’s current tax is one of the purpose of the implementation of GST in some countries. For instance, Malaysia’s SST (Sales and Services Tax) is abolished with the new implementation of GST. GST is an ample of consumption tax that covers the stages of economic activity. There are three stages of economy activity, namely the primary sectors, secondary sectors, and tertiary sectors (Borrington & Stimpson, 2014). In other words, all sectors are affected by GST’s implementation. For example, the woodcutter sells each tree for RM 50, the manufacturer buys one and pays the woodcutter RM 53 (RM 50 + 6% GST), and the woodcutter keeps the RM 50 and gives RM 3 to the tax collector.
Tax is a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law. Government imposes many types of tax. For example personal income tax, corporate income tax, payroll tax, sales tax and property tax.
Incentives given should not result to loss in revenues; otherwise it will not make a perfect sense. The problem regarding the complicated tax system in our country may be analyze and change considering that according to the 1987 constitution, “The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation. (Article VI, Section 28, Paragraph 1). The system should consider every possible situation and factors for a more collective way of taxation; this will be reflected on the concepts of good governance and division of labors in the bureaucracy.
Exports by definition, are consumed abroad and are usually not subject to VAT; VAT charged under such circumstances is usually refundable. This avoids downward pressure on exports and ultimately export derived revenue.
Double taxation is always considered to be one of the most important issues in international taxation. With the more and more business moving towards globalization and cross-border investment, double taxation is often cited as a major obstacle to liberate economic progress.
When taxes such as excise taxes and indirect taxes such as VAT are placed by the government, the government takes into account the price elasticity of demand of a product and the response of the consumer if price were to rise. The tax burden depends on the price elasticity of demand to establish of whom is to take majority of the burden. When price elasticity of demand is inelastic, the consumer will take majority of the tax burden. Tax incidence falls on the group that responds the least to price and has the most inelastic curve. The tax burden can possibly be split evenly between producer and consumer, by the decision of the producer. This occurs if the producer predicts the consumer will not respond well to a product’s rise in price, making the product now elastic and the majority of the burden would be placed on the producer. To resolve this matter, the producer pays a percentage of the tax burden and the consumer the remainder. However, if a product has an inelastic demand such as fuel and cigarettes, an excise tax that focuses on these individual products is used. Businesses determine price with the use of price elasticity of demand. If a business were to increase the price of an elastic good, it would be more affected than increasing an inelastic good. Consumers would stop spending money on
First of all, I learn what mean the tax and the people and corporation must pay the tax for the government. There are many different types of taxes such as income tax (means you get money from a job), wealth tax (which is real property taxes), consumption tax (we consume for sale and use taxes), tariff and duties from government take taxes. Thus, consumption taxes contains three types which are sales tax, use tax like Salik and value added tax like McDonald’s when they put a price in happy meal we didn’t know it take 1 percent for value