From the noise of GST news all over the web, One Breaking news come that has one more step towards implementation of GST : All Four GST Bills Passed in Rajya Sabha without Amendment.
On Thursday, Rajya Sabha passed all four GST Bills without any amendment. In last month, Lok Sabha had already passed four bills. This is One more step towards ahead in Implementation of GST from 1st July 2017.
The Four Bills are as below :
- The Central Goods and Service Tax Bill, 2017
- The Integrated Goods and Service Tax Bill, 2017
- The Goods and Service Tax (Compensation to States ) Bill, 2017
- The Union Territory Goods and Service Tax Bill, 2017
Goods and services tax commonly known as GST is a revolutionary indirect tax reform for the Indian economic landscape. There is only one issue in GST implementation i.e. tax structure or tax slabs which is to be decided on the next meeting of GST council scheduled on May 18-19.
With the introduction of GST, all the central government as well state government taxes will be subsumed into a single tax. Let’s see which of the taxes will be accommodated within GST.
Central government taxes to be subsumed in GST are:
- Central excise duty
- Additional excise duty
- Service tax
- Additional customs duty
State government taxes to be subsumed in GST are;
- State VAT/Sales tax
- Entertainment tax
- Entry tax
- Purchase tax
- Luxury taxes
Administration of GST:
There are two components of GST i.e. CGST (Central GST) & SGST (State GST) accounting for the fact that India has a federal structure of ruling. So both the governments i.e. centre and states will charge GST across the chain. Tax will be charged for every supply of goods as well as services. Centre would levy CGST and states would levy SGST on respective transactions. But the input tax credit for CGST as well as SGST can be used to discharge the CGST and SGST output liability. No cross transaction of tax credit is permitted.
GST in Inter-state transaction of goods:
For all the inter-state transactions, central government would collect taxes under Integrated GST (IGST). The IGST is believed to be roughly a sum of CGST and SGST. This IGST mechanism is designed to flawlessly ensure flow of taxes from one state to another. It is the responsibility of central government to transfer the importing state credit of IGST used for payment of SGST.
IT infrastructure for GST:
For the smooth & functional implementation of GST in the country, both central and state government have created and registered Goods & Services Tax Network (GSTN) as a non-profit and Non-government Company to provide IT services to government, taxpayers and stakeholders. The main objective of GST is to build an interface which is user friendly and efficient for taxpayers and government. GSTN is preparing and developing a state of art IT infrastructure for all the GST needs. This would ensure that all the taxes could be paid online, all the returns can be filed online without any manual intervention. The assessment of filed returns would be automatic.
Benefits of GST:
For business and industry:
- Easy compliance
- Uniformity of tax slabs
- Removal of cascading
- Gain to manufacturers and exporters
For central and state government :
- Simply and easy to administer
- Better controls on leakage of flow
- Higher revenue efficiency
For the consumer:
- Simple and transparent tax burden
- Relief in overall tax burden
- Automatic generation of returns