GST

GST

Various Taxes like Excise Duty, Value Added Tax(VAT), Central Sales Tax, Countervailing duty, Octroi, Luxury Test and Entry Tax will all be included under a single roof by GST. The very important Feature ofGST bill is that instead of collection of Taxes at every step, it will be collected in one step. Goods and Services will be treated equally and will be taxed similarly.
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GST Bill – Features

Here are the features of GST bill –

  • Single Step Tax Collection instead of multiple steps for different types of taxes
  • State and Parliament Legislatures will have concurrent powers to make laws on Goods and Service Tax (GST)
  • Additional Tax of upto 1 Percent will be imposed on Inter State Supply of Goods for two or more years by Center Government
  • With the Passing of GST Bill,improved Tax compliance is expected
  • Pureview of GST exempts Alcohol for human consumption
  • Compensation to the states will be provided by Parliament, for any kind of revenue loss upto 5 years
  • As mentioned before the bill has been already passed in Loksabha and currently Stuck in Rajyasabha. The reason for the same is that the current government doesn’t hold any majority there.

GST Bill – History

  • In 2009, UPA government opened a discussion regarding it. It was the first mention of GST. At that time this bill was introduced successfully but it couldn’t be passed
  • December 17,2014 was an important date for GST because NDA government made slight changes and redefined it in Lok Sabha
  • On 6th May 2015 Loksabha gave green Signal to GST bill

Concerns Related to GST Bill

The opposition(Congress) is demanding reforms in key areas. Mutual agreement is important aspect right now. Here are the concerns of Congress –
  • One percent additional tax
  • Cap of 18 percent
  • Possible Impacts of GST Bill after Introduction –
  • GDP to grow by 2 Percent
  • Solutions to Multinationals
  • Compensation Packages for revenue loss, Resulting in getting over the loss of fiscal powers

    Highlights of the Bill 

    The Bill amends the Constitution to introduce the goods and services tax (GST).
    Parliament and state legislatures will have concurrent powers to make laws on GST. Only the centre may levy an integrated GST (IGST) on the interstate supply of goods and services, and imports. 
     Alcohol for human consumption has been exempted from the purview of GST. GST will apply to five petroleum products at a later date. 
    The GST Council will recommend rates of tax, period of levy of additional tax, principles of supply, special provisions to certain states etc. The GST Council will consist of the Union Finance Minister, Union Minister of State for Revenue, and state Finance Ministers. 
     The Bill empowers the centre to impose an additional tax of up to 1%, on the inter-state supply of goods for two years or more. This tax will accrue to states from where the supply originates. 
      Parliament may, by law, provide compensation to states for any loss of              revenue from the introduction of GST, up to a five year period.

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