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This Is All You Should Know About GSTBill That Everyone Is Talking About!

India’s upper house of parliament on Wednesday passed a landmark tax reform bill after hours of debate that will introduce a new national sales tax, creating a common market across the country. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer, which will make India one unified common market.

Here are few key points about the GSTBill that we need to understand –

1. GST is a uniform indirect tax levied on goods and services across a country. Many developed nations tax manufacture, sale and consumption using a single, comprehensive tax.

2. Central Taxes GST would replace Central Excise Duty, Service Tax, Additional Duties of Excise & Customs, Special Additional Duty of Customs, and cesses and surcharges on supply of goods and services.

3. State Taxes GST would replace VAT, Central Sales Tax, Purchase Tax, Entry Tax, Entertainment Tax, taxes on advertisements, lotteries, betting and gambling, and state cess and surcharges.

4. According to PRS Legislature Research, the 2011 Bill defined GST as any tax on the supply of goods or services, except taxes on the supply of petroleum crude, high speed diesel, motor spirit (petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption.

5. The 2014 Bill defined GST as any tax levied on the supply of goods, or services, except taxes on the supply of alcoholic liquor for human consumption.

6. The main objectives of GST would be to eliminate excessive taxation. Central and state agencies often calculate taxes based not on the original cost of the product, but over and above the several layers of tax already levied on the product. This negatively affects the Gross Domestic Product of a nation.

GST will help the government and the tax payer as long as it is kept simple. Sadly, it will not be simple as there will be two GST’s – Central taxes GST and State taxes GST. The bill that cleared the upper house on Wednesday simply amends the constitution to grant the government new taxation powers.

The government is targeting April 2017 for GST to be in place. However, there is a lot of work to be done before then. GST is designed to be electronic with no manual filing of returns necessitating a vast IT infrastructure.

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