Goods and Service Tax Bill: All you need to know about GST Bill

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Goods and Service Tax Bill: All you need to know about GST Bill
Goods and Service Tax Bill: All you need to know about GST Bill

New Delhi : The GST is a Value added Tax (VAT) is proposed to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and state governments.

A lot of people have been asking about GST meaning and GST explanation in simple terms and this article provides just that. All the competition exams involving current affairs are expected to contain some sections for the about the GST Bill.

GST was first introduced during 2007-08 budget session. On 17th December 2014, the current Union Cabinet ministry approved the proposal for introduction GST Constitutional Amendment Bill. On 19th of December 2014, the bill was presented on GST in Loksabha. The Bill will be tabled and taken up for discussion during the coming Budget session. The current central government is very determined to implement GST Constitutional Amendment Bill.

GST is a tax that we need to pay on supply of goods & services. Any person, who is providing or supplying goods and services is liable to charge GST.

Indian Government is opting for Dual System GST. This system will have two components which will be known as

  1. Central Goods and Service Tax (CGST)
  2. State Goods and Service Tax (SGST)

The current taxes like Excise duties, service tax, custom duty etc will be merged under CGST. The taxes like sales tax, entertainment tax, VAT and other state taxes will be included in SGST.

Impacts of GST Bill on Indians:

  1. Fair Pricing
  2. Greater Transparency
  3. Economic Boost
  4. ignificant Changes in Prices

Important Facts about GST Bill: 

  1. The current GST Bill committee headed by Arvind Subramaniam and it has recommended a three-rate setup for rolling out GST Bill into the government successfully.
  2. The three tier structure is as follows. The goods meant for the poor should be taxed at 12%. 18% tax on all common items and 40% tax on luxury items.
  3. Alcohol, Petroleum and it’s products have been exempted from the initial structure of taxes.
  4. The States that have ratified GST are: Assam (August 12), Bihar (August 16), Jharkhand (August 17), Chhattisgarh (August 22), Himachal Pradesh (August 22), Gujarat (August 23), Madhya Pradesh and Delhi (August 24), Nagaland (August 24), Maharashtra, Haryana, Sikkim (August 29), Mizoram, Telangana (August 30), Goa (August 31) and Odisha (September 1).

Benefits of the GST Bill: 

  1. GST will replace 17 indirect tax levies and compliance costs will fall.
  2. It's currently fragmented along state lines, pushing costs up 20-30%.
  3. For many capital goods, input tax credit is not available. Full input tax credit under GST will mean a 12-14% drop in the cost of capital goods.
  4. It is good for export oriented businesses. Because it is not applied for goods/services which are exported out of India.