Contemporary Issues
Who to Work in India
1)What is GST
2)Central taxes replaced by GST and state taxes is subsumed by it.
3)The lok Sabha passed the Bill.
4)Provision of the bill.
5)Benefits of GST
i)for Industries and Businesses.
ii)for Central and State Government.
iii)for the Consumers.
1)What is GST :-
Good and Services Tax (GST) is an indirect tax levied when a consumer buys a good or service . India's current tax scenario is riddled with various indirect taxes which the GST aims to subsume with a single umbrella. The aims of bill to eliminate the cascading effect of taxes on production and distribution prices on good and services.
Cascading effect of taxes is caused due to levy of different charges by State and Union Governments separately. this tax structure raises the tax-burden on Indian products, effect of taxes on production and distribution prices on goods and services .
Central Taxes replaced by GST bill Central Excise Duty, Additional Duties of Excise and Customs, Special Additional Duty of Customs (SAD) , Service Tax and Cess and surcharges on supply of good and service .
State Taxes Subsumed in the GST bill VAT, Central State Tax , Purchase Tax, Luxury Tax , Entry Tax, Entertainment Tax, Taxes on advertisements, lotteries, betting, gambling and State Cess and Surcharge.
The Lok Sabha passed The Constitution (22nd Amendment ) (GST ) bill, 2014 on 8th August , 2016. The bill was passed by two-third majority, with 443 member voting in its favour and against in the final vote. Introduced in Lok Sabha in May 2015, the bill was passed by Rajya Sabha on 3rd August, 2016 with 203 vote in favour and none against. the passage of this historic GST bill has now paved the way fro the concept of one nation, one tax
The Union Government has set the ambitious target to roll out of the goods and service tax, (GST)
from 1st April, 2017 . It was announced by Union Finance Minister Arun Jaitley after unveiling a detailed road map for GST implementation. This announcement was made after Rajya Sabha had passed the Constitution (22nd Amendment ) (GST) bill 2014.
Provisions of the Bill :-
*The GST will have two components keeping in mind the federal structure of India: the Central GST (CGST) and the State GST (SGST).
*For goods and service that pass through several states or import, the Central will levy another tax, the Integrated GST(IGST).
*Alcohol fro human consumption has been kept out of the purview of GST.
*It empowers the center to impose an additional tax of upto 1% on the inter-state supply of goods for two years or more. This tax will accrue to Sates from where the supply originates.
*Initially, GST will not apply to some product such as petroleum crude, high speed diesel , motor spirit (petrol), natural gas and aviation turbine fuel. The GST Council will decide when GST will be levied on them.
*Tobacco the tobacco products will be subject to GST. The center may also impose excise duty on tobacco.
*Parliament may provide for compensation to states fro revenue losses arising out of the implementation of GST for up to 5 year, based on the recommendations of the GST Council.
Benefits of GST :-
*There will be uniformity of tax rates and structures across the country. It will increase certainty and case of doing business i.e. make it tax natural , irrespective of the choice of place of doing business in the country.
*Due to removal of cascading, it will have a system of seamless tax-credit throughout the value-chain, and across boundaries of Sates. It will help to reduce hidden cost of doing business.
*It would make compliance easy and transparent. The GST regime will have a robust and comprehensive IT system. Therefore , all tax payer service such as registrations, payments , returns, etc will be available to the taxpayer online.
*It will reduce transaction costs of doing business that will eventually lead to an improved competitiveness for the trade and industry.
*The subsuming of major Central and State indirect taxes in GST would the cost of locally manufactured goods and services . It will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports.
For Central and State Governments :-
*GST backed with a robust end-to-end IT System will be simple and easier to administer than all other indirect taxes of the Center and State levies so far.
*The robust It infrastructure of GST regime will result in better tax compliance that will curb leakages and incentivise tax compliance by traders.
*GST will lead to higher revenue efficiency as it is expected to decrease the co of collection of tax revenues of the government.
For the Consumers :-
*Due to single and transparent tax proportionate to the value of goods, and service it will remove many hidden taxes leading taxes leading to transparency of taxes paid in the final consumer.
*The overall tax burden on most commodities will come down because of efficiency gains and prevention of leakages which will benefit consumers.
Goods and Service Tax has all the ingredients of a modern, seamless taxation system. But its success will depend on taking onboard all the stakeholders and eliminating all the irritants which goes against the principles of GST. Goods and Service Tax will also contribute towards a robust macro-economic parameter,thereby increasing investor sentiment. Finally, the consumer will be ultimate beneficial as it would eliminate the cascading effect of tax.
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