[Economy] Goods & Service Tax: Revisited
The Goods and Services Tax is one of most talked about bill currently, proposed by BJP Government this is a Finance bill. If bill is put into practice it can raise India’s GDP by 1-2 %.
The bill which was introduced in loksabha by finance minister Arun Jaitley is still to be passed so that can be added as 122 Amendment (One Hundred and Twenty-Second Amendment) Bill 2014.The Bill is focusing to amend the Constitution to introduce a goods and services tax (GST) which will do away with various Central indirect taxes, including the Central Excise Duty, Countervailing Duty, Service Tax, etc. It will also subsumes State value added tax (VAT), octroi and entry tax, luxury tax, etc.The Bill aims at adding taxation on goods in concurrent list thus making it power of both center and state.Also states will not be able to impose taxes on company which is transferring goods from one godown to another of same company in different state, purchase or sale of goods will be taxed not supply of goods.
A GST council consisting 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, nominated by each State government will be made with a goal to optimize tax collection for goods and services by state and center.This Council will decide which taxes to be levied by the Center, States and local bodies will go into the GST; what all goods will be subjected to GST; also rates and basis of tax.
Additional 1% tax will be levied by center for supply of goods for inter-state trade, which will be given to state for minimum 2 years or till the time GST council will decide.If states incur losses , they can ask for compensation for upto 5 years period grant for which will be decided by Parliament.
This tax system will have huge impact on GDP, Manufacturing, Supply Chain, lifestyle of people of the country, will also curb the malpractices prevalent in country regarding tax.