30/06/2017
GST Bill : A Brief Summary
On 3 August 2016, Government Of India passed The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014, which is commonly known as the Goods and Services Tax Bill or the GST Bill. Originally published on 19 December 2014, the GST Bill proposes a national value-added tax to be implemented in India from June 2016. The bill was introduced in the Lok Sabha by Arun Jaitley, Finance Minister, Government of India.
What is GST
The GST is a comprehensive indirect tax on both goods and services that will replace the current levied by the Central and State governments. The GST will be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method which allows allows GST-registered businesses to claim tax credit to the value of GST they paid on purchase of goods or services as part of their normal commercial activity.
Structure of GST
The GST has dual structure, Central GST and State GST. The Central GST will replace Central Excise Duty, Additional Duties of Exice and Customs, Special Additional Duties of Custom, Service Tax, Cesses and surcharges on supply of goods or services. The State GST will subsume VAT, Central Sales Tax, Purchase Tax, Luxury Tax, Entry Tax, Entertainment Tax, Taxes on advertisements, lotteries, betting, gambling, State cesses and surcharges.
Benefits of GST
The implementation of GST is supposed to benefit both Central and State governments as well as the individuals and companies. According to the experts, it will promote more exports, create more employment opportunities and boost growth. Moreover, the GST will be collected at the point of sale and charged on the manufacturing cost which will benefit the individual as prices are likely to come down. Lower prices mean more consumption, and more consumption means more production, thereby helping in the growth of the companies.
