Goods & Service Tax (GST) – Complete Details || Benefits || Implementation
What is GST?
Goods and service tax (GST) is an indirect tax. Under this, a similar tax is imposed on goods and services. Different taxes are imposed on goods and services where GST is not applicable. If the government applies this bill from 2016, then only one tax will be levied on every item and every service.
What will be its advantages?
According to the Constitution, the Central and the State Governments may impose taxes on goods and services accordingly.
If a company or factory made its product in one state and sells it to another state, then it has to pay a lot of taxes to both states, which increases the price of the product. With the introduction of GST, the price of the products will be reduced.
According to a report by the National Council of Applied Research, the GST implementation could increase the country’s GDP by one to two to two percent.
On Which Products, It will Apply?
According to the 122nd Amendment of the Constitution passed in 2014, the will be applicable to all types of services and goods/products. Only alcohol will be out of this tax.
How will It work?
GST will have three components – Central GST, State GST and Integrated GST
Central and Integrated GST will be implemented by the Central Government while the state GST will be implemented by the state governments.
If GST is like VAT then why it is needed?
However, GST is a tax like VAT, but other types of tax will not be charged after its implementation.
Not only that, the VAT and Cenvat will also end after its implementation.
Same Price for Goods in any State
The implementation of GST will provide the biggest benefit to the common man. To buy any goods in the entire country, the same tax will be paid. That is, the price of any item in the entire country will remain the same. Like a car if you buy in Delhi, its price is different, while in other states, it costs a different price to buy the same car. With this effect, any goods will be available in any state at the same rate.
Decrease in Tax Dispute
Is it implements, then many times tax submission will get rid. This will reduce the chances of manipulation by the Tax Department officials while recovering the tax. Taxes will not be required by the same person or institution many times, all taxes will be collected from this tax. Apart from this, there will be the reduction in prices in many states where revenue will increase in many states.
Price of the Goods will be Reduced
With the implementation of this, the tax structure will be transparent, which will reduce tax disputes to a large extent. After the implementation of this, the VAT, entertainment tax, luxury tax, lottery tax, entry tax etc. will also end to the states. At the time of buying the goods, people have to pay 30-35 percent tax on that, it is likely to fall further to 20-25 percent.
Companies and businessmen will also benefit if GST is implemented. There will be no problem taking the goods from one place to another. When the cost of making the goods decreases, the goods will also be cheaper.
Who will be Harmed?
The Center will benefit from the implementation of GST but the states fear that it will harm them because, after this, they will not be able to recover a lot of tax from which their earnings will be reduced. Significantly, half the budget of several states runs from petrol and diesel. Keeping this in view, the Center has given relief to the states, giving them relief in the initial years on these items. Whatever the disadvantages of the states, the Center will compensate them for five years.
GST Latest News Updates
Yesterday, the government has finally presented the GST bill in the Rajya Sabha after agreeing with Congress and non-Congress opposition. In addition to the Congress, Left, BSP and JDU have also given their support in presenting this bill. However, there have been some major changes made to the GST bill to make this agreement.
Here are the changes –
- Under which 1 percent of the Interstate Transaction Tax has been removed. In the original bill, there was a one percent additional tax on the trade between the states for 3 years.
- After this amendment, the states will now be compensated for 100% losses for 5 years. Earlier, there was a provision of compensation for 100% in the first 3 years, 75% in the fourth year and 50% in the fifth year.
- A new arrangement has been made to resolve the dispute, in which the voice of states will be strengthened. The first dispute resolution was based on voting, in which two-thirds of the votes were from the states and one-third of the center.
- A new provision will be added which defines the basic principle of GST in the bill. In this provision, the states and common people will be assured of no harm.
News Source: http://hindi.news18.com/news/nation/goods-and-service-tax-449331.html