AN INSIGHT INTO THE BIGGEST INDIRECT TAX REFORM-GOODS AND SERVICES TAX.

As we are all aware, there has been quite a buzz going around for a over a year now, regarding the functioning of the Good and Services Tax.
For those whose questions are yet to be answered, here is a sneak peak into the the biggest indirect tax reform in India since 1947- Goods and Services Tax.It falls under the 122nd Constitutional Amendment,2014.

So,to begin with,
 WHAT EXACTLY IS THE GST BILL?
 The Goods and Services Tax bill is that tax that will be levied on the manufacture,sale and consumption of goods and services.In the words of the Indian Finance Minister,Arun Jaitley, the GST bill will lead to the economic integration of the country.The main function of the GST is to transform India into a uniform market by breaking the current fiscal barrier between states. Thus the GST will facilitate a uniform tax levied on goods and services across the country.Currently, the indirect tax system in India is complicated with overlapping taxes levied by the Centre and the State separately.
IN WHAT WAY IS GST BETTER THAN VAT?
The GST will have a 'dual' structure, which means it will have two components- the Central GST and the State GST. They will both have separate powers to legislate and administer their respective taxes. Thus equally empowering both.Taxes such as excise duty, service, central sales tax, VAT ( value added tax), entry tax or Octroi 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 called the integrated GST to tackle inter-state transactions.
THINGS TO KNOW ABOUT THE GST BILL
  • The Bill inserts a new Article in the Constitution make legislation on the taxation of goods and services a concurrent power of the Centre and the States.
  • The Bill seeks to shift the restriction on States for taxing the sale or purchase of goods to the supply of goods or services.
  • The Bill seeks to establish a GST Council tasked with optimizing tax collection for goods and services by the State and Centre.
  • The GST Council will be the body that decides which taxes levied by the Centre, States and local bodies will go into the GST; which goods and services will be subjected to GST; and the basis and the rates at which GST will be applied.
  • Under the Bill, alcoholic liquor for human consumption is exempted from GST. Also, it will be up to the GST Council to decide when GST would be levied on various categories of fuel, including crude oil and petrol.
  • The Centre will levy an additional one per cent tax on the supply of goods in the course of inter-State trade, which will go to the States for two years or till when the GST Council decides.
  • Parliament can decide on compensating States for upto a five-year period if States incur losses by implementation of GST.

Comments

Post a Comment

Popular posts from this blog

GSTR 1A Form (Download Excel PDF GSTR 1A Format)

GSTR 1A Form (Download GSTR 1A Format): To enter the Details of outwards supplies of goods or services, Return shall be filed in Form GSTR 1A. The format for GSTR 1A Form has been officially made available by the Central Government and we have provided the same below. The  GSTR 1A Form given here has been compressed for quick download and also optimized for mobile viewing. If you face any problems while downloading the  GSTR 1A Form or for any further suggestions relating to  GSTR 1A Form, post your comments below in our discussions section. Download GSTR 1A Form GSTR 1A Form Due Date        20th of Next Month GSTR 1A Form Purpose Outward Supplies GSTR 1A Form Link Download Illustration of GST Calculation : GSTR 1A Form Let us assume that the GST is set at 20%. Suppose that the manufacturing cost of a Product A is 100 and assuming a GST of 20% the total amount is Rs. 120. The next step of taxation would be when the Product is sold to consumers, le
Read more

GST HSN Codes for Exempted Goods and Services

GST Exempted Goods HSN Code list : The HSN Codes for Exempted Goods and Services in GST are provided below in table format. The HSN Code starts with 0101 for Mules and Hinnies. Ther are around 125 exempted goods and services in GST and HSN Code is provided for each one of them. In our Previous article, we have already explained in details GST Impact on Hospitals and Healthcare Services and also GST Bill Format . This list of HSN Codes for GST Exempted Goods have been share by CA.Ankita Mahajan. HSN Codes for Exempted Goods Total HSN Codes 126 Any Chapter Yes Services Included Complete List of HSN Codes for Exempted Goods HSN Code Exempted Goods 0101 Live asses, mules and hinnies 0102 Live bovine animals 0103 Live swine 0104 Live sheep and goats 0105 Live poultry, that is to say, fowls of the species Gallus domesticus, ducks, geese, turkeys and guinea fowls. 0106 Other live animal such as Mammals, Birds, Insects 0201 Meat of b
Read more