Ø Rajya sabha passed Goods & Services Tax(GST)bill on 7th
July 2016.
GST
was first proposed by former Finance Minister P. Chidambaram, in 2005
v Replaces
the all indirect taxes(sales taxes like CST, VAT,service tax,excise tax)except Customs duty.
v
With this the country had come under One Country – One tax concept.
v
The GST have two structures in it: Central GST(CGST) & State GST (SGST)
v
GST
regime brigs seamless and uniform market across the country and check the
evasion,boost the growth.
v
Short
term effects:
ü
Services like online shopping, flights,hotel
services and train tickets, Jewellery,ciggerattes,branded clothes and banking get costlier.
ü
Goods like SUVs,two wheelers,fans,aircoolers
and water heaters get cheaper,
v
Longterm
effects :
ü
Will
elimante multiple taxes on the firms and do the ease of business.
ü
Reduces
the logistics cost due to elimination of inte-state taxes.
ü
Capital
goods prices could fall by 12-14% and boosts the GDP 0.5%
ü
Reduce
the black money,the need for financial documentation is more.
·
GST if
set at 18% is less for the Goods compare to the present 24-26%.
·
GST if
set at more than 15% on present service tax rate.
·
Excemptions
from GST – Petrol,Diesel,Alchol,Power and Real estate.
v
States
can fix their own state GST.
v
Centre
will get the right to impose GST on state.
v
Out of 29
states 15 states should agree for this bill.
v
Amendments
to the bill.
§
No
surcharge of 1%
§
Compensation
for states for 5 years.
§
Establishment
of special council to solve conflict between centre & state,
§
Loksabha approved GST bill on 8th
August 2016 with few amendments.
§
All 443 members present in the Lok Sabha — which had earlier
passed it in May 2015 —voted in favour of the Constitution (122nd Amendment) Bill, 2014
·
It provides for constitution of a Goods and
Services Tax (GST) Council by inserting Article
279A in the Constitution. The Council will recommend to the Union and
States on the inclusion and exclusion of goods and services.
·
The bill passed in Rajya Sabha after which more than a
half of India's 29 states approved it
before the central and state governments would get equal powers to tax goods
and services.
·
With the passage of GST bill at every stage, the whole country, which is one-sixth of
world's population, would become a single market and would give a necessary
fillip as far as the trade is concerned.
·
The Assam
Assembly become the first state to ratify The
Constitution (122nd Amendment) (GST) Bill, 2014.
·
Tax credit is possible
with the implementation of GST.
Tax credit : A tax credit is a tax incentive which allows certain
taxpayers to subtract the amount of the credit from the total they owe the state.
