Friday, December 19, 2014
Something must know about Goods and Services Tax (GST)
New Delhi: There may be just few working days left for this Parliament session, but the Narendra Modi government is determined to introduce, on Monday, a bill to create Goods and Services Tax (GST). The centre aims to bring the tax into effect from April 1, 2016.
Five things about GST which one must know.
1) To make the economy stronger, GST will create a single and uniform tax structure, levied all over India on goods and services. GST will remove dual taxes that are levied at the State as well as Centre. It will help in streamlining the entire tax system for goods and services.
It is pertinent to mention here that GST is one of the most ambitious indirect tax reform ever planned in India.
2) The implementation of GST will lead to the abolition of multiple layers of taxation that currently exist in the country. At present taxes such as octroi, Central Sales Tax, State-level sales tax, entry tax, stamp duty, telecom licence fees, turnover tax, tax on consumption or sale of electricity, taxes on transportation of goods and services and et cetera have made the tax structure complex.
3) For now, taxes from two major items, sale of petroleum and alcohol, will not be subsumed by the GST.
4) GST will be collected in equal proportion by Centre and State. They will tax GST at the same rate. For example, if 20 per cent GST is charged on goods and services then Centre will collect 10 per cent and the State will collect the remaining 10 per cent.
5) Once GST comes into effect, tax administration will not only be simplified but will also be more business friendly. It will help both, small and medium enterprises (SMEs) as well as large corporate, in filing tax returns and paying taxes.