2016-09-26

Dear Readers, Today in Special News Article we are presenting before you the important points you need to know about the GST bill. The Goods and Services Tax Bill or GST Bill, officially known as The Constitution (One Hundred and twenty second Amendment) Bill, 2014, proposes a national Value added Tax to be implemented in India from 1 April 2017. An empowered committee was set up by Atal Bihari Vajpayee government in 2000 to streamline The GST model to be adopted and to develop the required backend infrastructure that would be needed for its implementation.

The Constitution (122nd) Amendment Bill comes up in RS, on the back of a broad political consensus and boosted by the ‘good wishes’ of the Congress, which holds the crucial cards on its passage. Here’s how GST differs from the current regimes, how it will work, and what will happen after Parliament clears the Bill...



History: The Constitution (122nd Amendment) Bill, 2014 was introduced in the Lok Sabha by Finance Minister Arun Jaitley on 19 December 2014, and passed by the House on 6 May 2015. In the Rajya Sabha, the bill was referred to a Select Committee on 14 May 2015. The Select Committee of the Rajya Sabha submitted its report on the bill on 22 July 2015. The bill was passed by the Rajya Sabha on 3 August 2016, and the amended bill was passed by the Lok Sabha on 8 August 2016.

Definition: GST i.e. Goods And Services Tax. That means it will be a single taxation structure. It is an indirect tax and will lead to abolition of octroi, central sales tax, service tax, central excise tax and VAT. Both central ans state governments will impose GST on good and services produced and the imports in the country.

Categories exempted : Income tax, Corporate tax, and capital gains. Apart from this exports, alcohols and petroleum products will be kept out of GST.

Benefit to economy : As there will be single taxation structure in the country it will lead to simplified and transparent tax structure. It will broaden the tax base and create a common market across states.

Report by NCAER (National Council For Applied Economic Research) told that there will be an increase in GDP ratio . An increase growth in between 0.9% to 1.7%. Exports will increase between 3.2% and 6.3% while imports increase 2.4-4.7%.

Benefit to Corporates : As earlier companies have to pay extra cost that increases the cost price of goods and services making them less competitive to China or other powerful countries and time wasted in filing myriad taxes deters the entrepreneurs in investment in India.

Will Goods and services become costly ? : well after the implementation the highest rate of taxation for the 1st year will be around 15% and for the second year will be 12%. However GOODS deemed necessary or of basic needs will taxed at a lower rate.

State Governments Loss ? : Some states do fear that GST will lead to denting the collections. However central government says that it will compensate for the revenue losses. Mr Arun Jaitley said that an amount of Rs 11000 Crore has been set aside for this purpose.

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