Wednesday, 3 August 2016

GST Bill has been passed in Rajya Sabha, - Effect ,Structure and Benefits of Goods and Service Tax.



GST Bill has been passed in Rajya Sabha, - Effect ,Structure and Benefits of Goods and Service Tax.

Rajya Sabha yesterday (3 August 2016, Wednesday) approved the crucial 122nd constitutional amendment to turn the bill into law. The Lok Sabha has already passed the bill.

In order to incorporate the amendments approved by Rajya Sabha, the bill will go to the lower house. Rajya sabha approved the Constitutional (122nd Amendment) Bill,2014 with 203 votes in favour and none against.

Goods and Service Tax

GST is an inclusive Tax that will replace current indirect taxation regime. It will be lived on both goods and services. It will have a dual structure –Central GST & State GST.

At Central level GST subsumed the following taxes
Ø Central Excise Duty,
Ø Additional Excise Duty,
Ø Service Tax,
Ø Additional Customs Duty commonly known as Countervailing Duty, and
Ø Special Additional Duty of Customs.

At State level GST subsumed the following Taxes
Ø State Value Added Tax/Sales Tax,
Ø Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States),
Ø Octroi and Entry tax,
Ø Purchase Tax,
Ø Luxury tax, and
Ø Taxes on lottery, betting and gambling.

Structure of GST

GST will be levied on every supply of goods and services.  

The Central Goods and Services Tax (CGST) would be levied and collect by centre. The input tax credit of CGST is allowed while discharging the tax liability of CGST. Cross utilization of CGST between goods and services allowed.

The State Goods and service Tax (SGST) would be levied and collect by the state. The input tax credit of SGST is allowed while discharging the tax liability of SGST. Cross utilization of SGST between goods and services allowed.

The cross utilization of CGST and SGST would not be allowed except in the case of inter –state supply of goods and services (IGST).

In case of Inter –State Transactions, the Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-state supplies of goods and services. The IGST would roughly be equal to CGST plus SGST.

Benefits of GST

Ø Single and transparent tax
Ø Reduction in prices
Ø Lower Tax rates
Ø Easy Compliance
Ø Reduction in compliance cost
Ø Uniformity of Tax rates and structure

Tax on Imports

IGST will be lived on all imports.


1 comment:

  1. gst compliance in banking
    Personalize products, offers, pricing and loyalty programs; prevent revenue leakage and ensure regulatory compliance with a billing solution.

    ReplyDelete