GST is a new form of indirect tax in India. It is also at times termed as the tax levied on the sale of Goods and Service. As an aftereffect of the soon to be one-year-old GST system in India, common man may be forced to pay more for availing public services like National Highways and Railways.
GST has increased the spendings on current infrastructure projects as well as cost estimates of future infrastructure projects related to national highways and railways by 5-10%. Private Sector infrastructure developers can, however, avail the ITC policy under GST to negate the extra cost. But ITC cannot be availed on government spending.
The service tax post GST introduction has increased to 18%. This is three times more from the 6% service tax levied during the erstwhile VAT regime. However, the ITC norm under GST ensures that private developers are not burdened by the extra tax on projects.
On the other hand, Government projects do not attract ITC as the expenditures or investments are proceeds obtained from GST and not liable for ITC. Government department does not sell anything.
