GST in India

Do you know about the GST(Goods and Service Tax). In a landmark decision, the parliament passed the much anticipated Goods and Services Tax. The GST Bill was passed in the RajyaSabha on Monday with 203 votes in favour paving the way for a historic change in the dimension of India’s growth story. So Below are Most Important Points all about the GST in India.

  • Now, GST in simple terms means a uniform tax that will be implemented across the nation. Goods and Service Tax will replace all the indirect taxes that are levied by Central and State Governments.
  • The current committee headed by ArvindSubramaniam has recommended the three-rate setup for rolling out GST successfully. The panel has recommended that for goods that are meant for the poor, 12% GST can be levied. The panel has also suggested an 18% GST for all other common items and 40% for luxury items.
  • In this newly passed GST Bill or the Constitution (122 Amendment) Bill, 2014, the exemption list includes alcohol, petroleum and its products.
  • GST will enable the creation of the GST Council comprising the Union Finance Minister and members of the State Government. The Council will look into all monitor all issues relating to GST and suggest recommendations on improving the GST Bill. It will look into all factors such as taxes, exemptions and surcharges. The Council will decide the tax rate that will be levied by the Centre and the State.

How will GST work in India?

  • In a first of its kind initiative, the GST will be implemented in two components – Central GST or CGST and State GST or SGST. This dual GST will be levied on all the supply of goods and services across the country.
  • Therefore, if there is a sale within the State, then the both CGST and SGST will be charged. However, if the sale is outside the State, then only the Intra-State GST will be levied by the Centre.
  • CGST is doing away with indirect taxes such Central Excise Duty, Service Tax, Addl. Customs Duty, Special Addl. Customs Duty as well as Addl. Excise Duty. These indirect taxes are those that are collected by the Centre.
  • SGST will remove indirect taxes on goods and services which are charged by the State such as VAT, Entertainment Tax, Purchase Tax, Octroi, Luxury Tax and Entry Tax.
  • The credits of Input Tax of CGST will be accessible for settling the output of CGST liability at every stage. Likewise, in the States, the credits of SGST taken on the inputs will be made available for clearing the output of SGST’s liability at each stage.

Benefits of GST in India

  • For Corporate India, GST will remove the cascading effect of tax. As a result of which, double taxations will reduce as the Centre and State are working in tandem. In short, we will see crucial step towards reforming the indirect tax system in India.
  • Another benefit is the intra-state business will be cheaper. The tax burden on logistics will reduce and become seamless as companies will have to pay a uniform tax in all states across the country.
  • GST paves the way for India becoming a national market. For international players, this uniform tax structure on indirect tax will help in ease of doing business.
  • The implementation of GST will also streamline the unorganized players as all stakeholders who have already paid taxes will compliance proofs to claim their set-offs. This will bring in transparency in the system.
  • For the Government, the GST is boon that was long coming. The first benefit would be easier administration, especially as all the indirect taxes are replaced by GST.
  • The coordination between the State and Centre will improve as there is no management of various taxes such as service tax, excise duty, etc. In addition, a robust IT infrastructure set-up will provide a smooth transfer of credit from input tax from one level to the other in the supply chain.
  • For the consumers, who are at the end of the supply chain, will be the biggest beneficiaries, if the companies transfer the relief gain through GST to them.
  • The consumers will not have to pay more for any goods or services as the hidden taxes are all removed in the GST. This will bring transparency in the grass root level of the supply chain.

So Hope this article is helpful for you regarding the all important points about the GST in India. If you have any query regarding the GST in India then Just comment on this article and share your views.