www.caspot.com brings you the exclusive post of How Things Will Change In Tax By GST in India ? Complete Explanation On GST Applicability
Concept
GST or Goods and Service Tax is an
indirect tax levied on value addition done on goods and services. It
shall replace all other kinds of indirect taxes levied at central or
state level like excise, customs, VAT etc. It shall be a destination
based tax in India.
Origination and Recent developments
This concept was first introduced by the
Union Finance Minister during the central budget of 2007–2008. On 17th
December, 2014 the Union Cabinet Minister approved the proposal for
introduction of the GST Constitutional Amendment Bill. On 19th December,
2014, our Finance Minister Shri Arun Jaitley has presented the
Constitution (122nd Amendment) Bill, 2014 on GST in Lok Sabha.
Proposed amendments in the Constitution
shall harmonise the indirect tax regime as it shall provide the Central
and State Legislatures to levy and collect taxes on value addition on
goods as well as services. GST shall lead to reduced tax compliances,
more collection of taxes, lower incidence of taxes etc. which will be
beneficial to economy as well as the final consumers.
Salient features of Constitution (122nd Amendment) Bill, 2014
The salient features of the proposed amendment in constitutional bill are as follows:
Power to levy and collect taxes
ii. Article 246A shall confer powers to Union and State legislatures to make laws on GST.
iii. Article 279A shall facilitate creation of GST council which shall be under the chairmanship of Union Finance Minister.
Nature of taxes subsumed as
i. Central taxes: Central
excise duty, service tax, additional excise duty, Additional customs
duty, Special Additional Duty of Customs, Central cesses and surcharges.
ii. State Taxes: VAT/Sales
tax, Central Sales Tax, Entertainment tax, Octroi and Entry tax,
Purchase tax and Luxury tax, Taxes on lottery, betting and gambling,
state cesses and surcharges.
iii. Taxes shall be levied both at
Centre and State simultaneously as CGST (Central Goods and Service Tax)
and SGST (State Goods and Service Tax).
Excluded items
a. Alcoholic liquor for human consumption
b. Petroleum crude, high speed diesel,
motor spirit (petrol), natural gas and aviation turbine fuel (Excluded
till the date of further notification)
c. Tobacco and tobacco products
d. Taxes on entertainment and amusements are given to District Council to levy and collect taxes.
Additional tax
An additional tax not exceeding 1% shall
be levied on all the interstate transactions to be collected by the
state where the service or the supply of goods originate, for a period
of two years or extended as may be decided by the GST council.
GST Council- Constitution and functioning
i. Shall be constituted in 60 days from the date of enactment of the bill.
ii. Shall handle major law relating
issues like, rates of taxes, exempted goods, principles of levy and
apportionment of IGST etc.
Other important features
i. Compensation to the states shall be
provided for five years: 100% for first 3 years, 75% in fourth year and
50% in fifth year.
ii. The term ‘Services’ shall be exhaustively defined as ‘anything other than goods’.
iii. The concept of ‘declared goods of special importance’ has been done away with.
iv. The import of goods and services or both into the territory shall be considered as interstate trade or commerce.
Conclusion /Future:
i. The proposed Constitution (122nd
Amendment) Bill, 2014on GST shall require at least two-third of majority
of the members present and voting in Lok Sabha and Rajya Sabha.
ii. The bill shall require ratification from the State Legislatures of not less than one-half of the States.
iii. It shall then be required to take assent from the President post which the Constitution shall stand amended.
Indian economy is looking forward to
this “Single biggest tax reform since Independence” which shall bring in
various benefits to the assessees as well as the Governments.
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