What is the GST Bill

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IndiaToday.in |New Delhi,November 28, 2015|Edited by KCArchana| UPDATED12:36 IST

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The Good and Services Tax is the biggest indirect tax reform since 1947. This will be leviedon manufacture sale and consumption of goods and services.

In the words of the Finance Minister , the GST bill will lead to the economicintegration of India.

The main function of the GST is to transform India into a uniform market by breaking thecurrent fiscal barrier between states. Thus the GST will facilitate a uniform tax levied ongoods and services across the country.

Currently, the indirect tax system in India is complicated with overlapping taxes levied by theCentre and the State separately.

What is the GST Bill? What does it meanto you and me?The Good and Services tax in the biggest indirect tax reform since 1947 and it haspotential to lead the economic integration of India.

Finance Minister Arun Jaitley Photo: Reuters

Arun Jaitley

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Framework of the GST will replace indirect taxes

The GST will have a 'dual' structure, which means it will have two components- the CentralGST and the State GST. They will both have separate powers to legislate and administertheir respective taxes. Thus equally empowering both.

Taxes such as excise duty, service, central sales tax, VAT ( value added tax), entry tax oroctroi will all be subsumed by the GST under a single umbrella.

With passing of the GST bill, we can expect a climate of improved tax compliance.

Thus, the GST will basically have only three kinds of taxes, Central, State and another calledthe integrated GST to tackle inter-state transactions.

When is the proposed GST set to start functioning and what are the hurdles?

The GST regime is intended to be functional from 1st April, 2016.

The first mention of the bill was in 2009 when the previous UPA government opened adiscussion on it. They were successful in introducing the bill but failed to get it passed.

On 17th December 2014, the NDA government made slight changes to it and redefined it inthe Lok Sabha. The bill got cleared on May 6th this year.

However the current challenge facing the bill is that it needs two-third majority of bothhouses and 50 percent of the state assemblies will have to ratify it.

The bill is now stuck in the because the current government does not hold amajority here.

The role of the opposition

The demands for reforms in key areas of the GST has been stalling the process ofpassing the bill.

Three main concerns of the Congress over the bill are:

-one per cent additional tax as goods move across states -the constitutional cap of 18 per cent and an independent dispute redressal mechanism. -the party has maintained that the government was ignoring the concerns raised by theparty on the legislation.

They want the to be referred to a Select Committee for review.Copy to Clipboard

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The impact and relevance of the GST bill

According to Finance Minister Arun Jaitlety the GST will be instrumental in helping the GDPof India to grow by 2 percent.

The GST also offers a solution to the multinationals as it breaks down the indirect taxstructure into one single tax payable by the companies.

Although the states have feared loss of fiscal powers, the Constitutional amendment billhas promised to solve this by giving compensation packages for three years for any kind ofrevenue loss.

The bill has proposed to have GST council wherein all union and state minister in charge offinance will be on a equal footing. It will also have a Dispute Settlement authority to mitigatethe tensions between the centre and state smoothly.

One main contention for the state in the GST is the inclusion of petroleum products. Thecurrent consensus on this is that the states will continue to levy sales tax/VAT on thesewith the exception of imports and inter-state trade.

With the to get consensus on of the GST,we have to hold our breaths till it is functional by the proposed deadline of April 1st 2016.Copy to Clipboard

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Latest25 comments

ME What is your opinion?

Name Email Post

Lovenish Soni India

GST bill is an great bill. GST help in improve & increase the economic growth rate andtrade. Easy to charge the tax on manufacturing goods at one place , and also beneficial forcompany's as well as public and consumer.

a day ago (0) (0) reply(0)

LS

Harda United States

Whatever would be the targets of GST without contradicting which party had initiated , theconcerns members should take it into better motivational way for the people and so for thecountry..

4 days ago (0) (0) reply(0)

H

SUNEEL

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SUNEEL India

Fu_k.... Yaarrr GST will increases Trading in the country which will leads to Monopoly.......ITS DAMN BAD IDEA


S

Haringa Pulu United States

Concept of bringing GST into reality will be achieving a milestone by modi govt in d field ofrevenue collection, no matter concept was initially brought by UPA govt. Hope thatuniformity in taxes will be a big relief for the public in general. But when we look at fromthe producer point view manufacture cost in different states may differ in this case howGST is balancing the producer??


HP

Gautam India

It was not brought by UPA but by Atal government in 2000 itself when a committee wasappointed by him.


G

Vasu Garg India

Excellent approach by pm modi as it wld lead to better governance


VG

Himanshu Dhakad India

Goods and Service Tax Story So Far via @sharethis GST BILL

9 days ago (1) (0) reply(0) MaheshUp Voted

Himanshu Dhakad India

Goods and Service Tax Story So Far via @sharethis GST BILL


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