GST(Goods and Service tax) Bill has been passed in Rajya Sabha and will present in Lok Sabha soon. The Government is keen to implement GST from the next financial year. But people of India hardly know what is going to happen in GST and how many departments will be shut after GST will be introduced. There are some points which should know about one nation one tax which is GST.
1- Now the Centre and the States, both have powers to make laws with respect to levy of taxes on both goods and services. However, the Parliament will have exclusive powers to make laws with respect to goods and services tax where the supply of goods, or services, or both takes place in the course of inter-State trade or commerce.
2. CGST collected from intra-State trade or commerce shall be assigned to States in accordance with law formulated by the Parliament.
3. IGST collected from inter-State trade or commerce shall be apportioned between the Union and the States on the recommendations of the GST Council.
4. GST apportioned by Central Government to States will not form part of Consolidated Funds of India.
5. The President of India will constitute GST council.
6. Every decision of GST Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting. The Centre will have one-third voting power and all the States will have together two-thirds of vote.
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| One Nation One Tax- Some Points to Know about GST |
7. Petroleum products are presently outside the ambit of GST. However, GST Council will recommend the date on which the GST would be levied on such products.
8. Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute between the Centre and the State(s) or two or more States.
9. The Parliament will provide compensation to the States for loss of revenue arising on account of implementation of the GST for a period of five years on the recommendations of the GST Council.
10. 1% additional tax will not be levied on inter-state trade or commerce.
Though Constitutional amendment bill has been cleared by the Rajya Sabha, yet a lot of work remains to be done.Such amendment bill needs to be cleared in the Lok Sabha and has to be passed by legislators in at least half the States by a two-thirds majority and then GST Council would be established.
The rate at which the tax is to be levied has still not been decided. Several States have suggested that the GST rate should be over 20% to minimize revenue losses.
Once GST is implemented, it would definitely fulfill the object of ease of doing business in India. It will provide easy compliance and uniformity of tax rates and structures for the industry. GST is expected to lead to easier administration and enforcement by the Central and State governments. From the consumer's point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods. Goods like Small Cars, Two wheelers, Movie Tickets, Electronic Items, etc., will be cheaper. But Air Travel, Insurance, Textile, Jewellery, Mobile Calls, Cigarettes will be costlier.
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