Goods & Services Tax (GST) Supplementary Bills Passed in Loksabha
Goods and Services Tax got passed in Loksabha (Indian Parliament) on 29th March 2017. It is expected that implementation of GST will bring in 10 major changes in the taxation system in India.
Much debated Goods and Services Tax (GST) system has now become reality by coming closer to meet its rollout across India on July 1 this year. Loksabha today approved its 4 supplementary legislations.
Following supplementary bills were passed on Wednesday, 29th March 2017:
- The Central GST Bill, 2017
- The Integrated GST Bill, 2017
- The GST (Compensation to States) Bill, 2017
- The Union Territory GST Bill, 2017
These bills were passed with number of amendments suggested by and negotiated with opposition parties.
After successful rollout of GST the goods and services are expected to become cheaper as there would be only 1 tax across India as against the current mechanism of having tax on tax.
Following 10 major revisions are expected to happen in Tax Regime after GST rollout:
- After the rollout, there will be only 1 tax applicable across whole of India. Earlier few taxes used to be levied by Central Government and few by State Governments. This used to result in tax on tax scenario, making goods and services costlier.
- State and Central government together will decide and impose one single tax on goods and services which will result in bringing down the cost of goods and services across the country. Finance Minister said that there is no intention to put extra burden on general public. Luxury items and items harmful to health are going to be taxed heavily.
- There will be different types of taxes. As per FM, there is no point in having same tax rates for different types of goods and services. For e.g. Flip-flops and BMW can be taxed at the same rate as one is necessity and other is luxury.
- GST Council is having representatives from 32 states and Union Territories. It is mentioned that during the first 5 years if any of state gets loss on account of tax received, then Central government will compensate the loss to the state. Jammu & Kashmir is kept out of the GST regime.
- It is expected that after GST rollout, tax evasion would be difficult.
- Movement of Goods and Services would be easier and seamless throughout the country.
- Rollout will improve the tax collection by both central and state governments.
- This unification of taxation system will benefit the consumers. It is expected that this will boost the online transactions and will further increase number of tax payers. This will eventually benefit the honest taxpayers.
- According to the study conducted by World Bank, new tax regime will add 2% to the GDP.
- Though no tax slabs have yet been finalized. It is said that there could be tax slabs like 0%, 5%, 12%, 18%, and 28%. Essential food items could be taxed at 0% while the harmful luxury items could be taxed heavily.
So lets hope Goods and Services Tax (GST) achieves its desired objectives and we see inflation coming down.
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