History Of GST
Good and services tax(GST) was introduced in the year 2000 when the BJP govt. formed the committee to design a model for goods and services tax. On 28th Feb 2006, during the budget season of (2006-07) of the union govt., then the Finance Minister made the announcement that goods and services tax would be introduced from 1st April 2010 and that the empowered committee of state finance minister, only ministry`s request , would work in tandem with central govt. in preparing a roadmap for introduction of Goods and Services Tax in India.
What is GST bill?
GST means “Good and Services tax” in which the Consumer is the King.It is the 122nd Amendment of the Indian Constitution. The Goods and Services Tax bill, is to be India’s biggest tax reform, will simplify the current system of taxation. The bill will convert the country into a unified market by replacing all indirect taxes with one tax.
This is an indirect tax which means that the tax is passed on to the last stage wherein it is the customer of the goods and services who bears the tax.It is a consolidated tax based on a uniform rate of tax which is fixed for both goods and services which will be payable at the final point of consumption. This is the case even today for all indirect taxes but the difference under the GST is that with streamlining of the multiple taxes the final cost to the customer will come out to be lower on the elimination of double charging in the system.
Present Scenario Of GST.
In order to introduce GST, the Lok Sabha passed the much delayed constitutional amendment bill to pave the way for a new bill on the uniform tax regime. The bill is set to be sent to a parliamentary committee for review by the Rajya Sabha, where the opposition has said that they are in favour of the GST bill, but want some amendments to be made by the union government to be vetted by a selection committee of the Rajya Sabha .
The GST bill that was conceived twelve years ago, has been kept pending because there were some changes needed in the basic bill and all states were not in favour of many provision of the bill particularly with the clause dealing with sharing revenue collected through GST.
Salient features of GST
- Transparency of tax collection between the Central and States. The trust will be maintained between central and stated which will improve federal structure.
Every state are interdependent on each other.Exchange of goods and services, through GST it will boost the exchange which will give rise to the increase in the income of every state.
Every state economy will be increased, it will maintain the balance between the states, no state will be backward.
Needs of the common people will be free from the limitation of tax.
Inflation rate will be fixed at 4%.
GSDP as tax had always been a bigger problem. Through GST every state will take their own decision for the infrastructure development.
Cost of tax collection will be reduced by filling through online channels.
Tax on tax will be totally eliminated.
Flaw of black money and corruption will be totally eliminated.
Common man will have the loan through REAL TIME DATA(proper maintaining of funds in the bank).
Issues in GST
GST will not be a cost to registered retailers, therefore, there will be no hidden taxes and the cost of doing business will be lower. This, in turn, will help Export being more competitive.
GST will give bad impact on the real estate market.
Manufacturing states will be affected.
Items not under GST
How will GST work?
What are the taxes which GST will replace?
* Central Excise Duty
* Duties of Excise (medicinal and toilet preparations)
* Additional Duties of Excise (textiles and textile products)
* Additional Duties of Customs (commonly known as CVD)
* Service Tax
GST will replace all the Central tax which will be fixed.
* State VAT
* Central Sales Tax
* Purchase Tax
* Luxury Tax
* Entry Tax (all forms)
* Entertainment Tax (not levied by local bodies)
* Taxes on advertisements
* State cesses and surcharges.
Conditions for the applicability of GST
- It should be passed by 16states.(presently passed by 13 states)
Requirements of Indian Constitution to be fulfilled.
It should be passed by Central GST, State GST, Integrated GST.