The Goods and Services Tax (GST), the major reform in India’s indirect tax structure since the economy began to be opened up 25 years ago on the back of a broad political consent and enhanced by the ‘good wishes’ of the Congress, it holds the crucial cards on its passage.
With GST finally looks all set to become reality, let us take a look at the ten basic things that everyone should know about the GST Bill.
Officially known as the Constitution (One Hundred and Twenty-Second Amendment) Bill 2014.
GST was introduced by Finance Minister Arun Jaitley in the Lok Sabha on December 19, 2014.
The Bill seeks to revise the Constitution to introduce a goods and services tax (GST) that will subsume several Central indirect taxes, including the Central Excise Duty, Service Tax, Countervailing Duty, etc. It also subsumes State value added tax (VAT), Octroi and entry tax, luxury tax, etc.
The Bill introduces a new Article in the Constitution make legislation on the taxation of goods and services a concurrent power of the Centre and the States.
The Bill seeks to change the constraint on States for taxing the sale or buying of goods to the supply of goods or services.
The Bill seeks to form a GST Council tasked with boosting tax collection for goods and services by the State and Centre. The Council will comprise of the Union Finance Minister (as Chairman), the Union Minister of State in charge of revenue or Finance, and the Minister in charge of Finance or Taxation or any other, voted by each State government.
The GST Council would resolve on which taxes levied by the Centre, States and local bodies will go into the GST; goods and services will be exposed to GST; and the base and the rates at which GST will be applied.
Under the GST Bill, alcoholic liquor for human consumption is exempted from GST. Also, GST Council would decide when GST would be imposed on various categories of fuel, including crude oil and petrol.
The Centre will charge an additional one per cent tax on the supply of goods in the progress of inter-State trade, which will go to the States for two years or till when the GST Council decides.
Parliament can choose on compensating States for up to a five-year period if States suffer losses by implementation of GST.