Goods and services Tax (GST), The constitution (122nd amendment) Bill, 2014.
What is GST??
The tax that is implemented on any kinds of goods as well as services.
Or
GST tax is a consumption based tax, which is levied when a consumer buys a good or services.
Why does India need GST?
Purpose: GST is introduced majorly due to two reasons.
1. Current Indirect taxation structure is full of uncertainties due to multiple rates ( Eg: VAT, Excise Duty, service tax
2. Due to multiple rates,there are multiple forms and intern cumbersome compliances. This will improve tax compliances.
Highlights of the bill:
1. Parliament and state legislature will have concurrent powers to make laws on GST . Only the centre may levy an Integrated GST (IGST) on interstate supply of goods and services, and imports.
2. Alcohol for human consumption has been exempted from the purview of GST. GST will apply to 5 petroleum products at a later period.
3. The GST rate will recommend rates of tax, period of levy of additional tax, principles of supply, special provisions to certain states e.t.c.
4. The bill empowers the centre to impose an additional tax of upto 1%, on the inter-state supply of goods for two more years. This tax will accrue to states from where the supply originates.
5. Parliament may,by law, provide compensation to the states for any loss of revenue from the introduction of GST, upto a 5 Year period.
GST Council:
1. The GST council will consist of:
a) The union finance minister (as chairman)
b) The union minister of state in charge of revenue or finance
c) The minister of finance or taxation or any other minister, nominated by each state government. All the decisions of the GST council will be made by three-fourth majority of the votes cast; the centre shall have one-third of the votes cast, and the states together shall have two-third of the votes cast.
The GST council will make recommendations on
a) Taxes, cesses and surcharges to be subsumed under the GST.
b) Goods and services which may be subject to, or exempt from GST.
c) The threshold limit of turnover for application of GST
d) Rates of GST
e) Model GST laws, principles of levy, apportionment of IGST and principles related to place of supply;
f) Special provisions with respect to the North eastern states, Himachal Pradesh and Jammu and Kashmir,and Uttarakhand.
The GST council may decide the mechanism for resolving disputes arising out of its recommendations.
Key Featurs:
The bill enables parliament and state legislatures to frame laws on GST. The GST council, that includes representatives from the centre and all states,will make recommendations on the implementation of GST.
Scope of GST
1. GST is applicable on the supply of goods or services.
2. Alcoholic liquor for human consumption is exempt from GST.
3. Initially GST will not apply to
a) petroleum crude
b) high speed diesel
c) motor spirit (petrol)
d) natural gas, and
e) Aviation turbine fuel.
The GST council will decide when it will be levied on them
4. Tobacco and tobacco products will be subject to GST. The centre may also impose excise duty on tobacco.
Levy of GST:
1. Both parliament and state legislatures will have power to make laws on the taxation of goods and services. A law made by parliament in relation to GST will not override a state law on GST.
2. The central government will have the exclusive powers to levy and collect GST in the course of interstate trade or commerce, or imports. This is known as Integrated GST (IGST).
3. A central law will prescribe the manner in which the IGST will be shared between the centre and states,based on the recommendations of the GST council.
Additional Tax on supply of goods:
An additional tax of upto 1% on the supply of goods will be levied by centre in the course of inter-state trade or commerce. This tax will be collected by centre and directly assigned to the states from where the supply originates.
This tax will be levied for two years, or for a longer period as recommended by the GST council. The central government may exempt certain goods from such additional tax.
The principles for determining the place of origin from where the supply of goods takes place will be formulated by a law of parliament.
Compensation to states:
Parliament may,by law, provide for compensation to states for losses arising out of the implementation of GST, based on the recommendations of the GST council. Such compensation could be for a maximum of five years.
What is GST??
The tax that is implemented on any kinds of goods as well as services.
Or
GST tax is a consumption based tax, which is levied when a consumer buys a good or services.
Why does India need GST?
Purpose: GST is introduced majorly due to two reasons.
1. Current Indirect taxation structure is full of uncertainties due to multiple rates ( Eg: VAT, Excise Duty, service tax
2. Due to multiple rates,there are multiple forms and intern cumbersome compliances. This will improve tax compliances.
Highlights of the bill:
1. Parliament and state legislature will have concurrent powers to make laws on GST . Only the centre may levy an Integrated GST (IGST) on interstate supply of goods and services, and imports.
2. Alcohol for human consumption has been exempted from the purview of GST. GST will apply to 5 petroleum products at a later period.
3. The GST rate will recommend rates of tax, period of levy of additional tax, principles of supply, special provisions to certain states e.t.c.
4. The bill empowers the centre to impose an additional tax of upto 1%, on the inter-state supply of goods for two more years. This tax will accrue to states from where the supply originates.
5. Parliament may,by law, provide compensation to the states for any loss of revenue from the introduction of GST, upto a 5 Year period.
GST Council:
1. The GST council will consist of:
a) The union finance minister (as chairman)
b) The union minister of state in charge of revenue or finance
c) The minister of finance or taxation or any other minister, nominated by each state government. All the decisions of the GST council will be made by three-fourth majority of the votes cast; the centre shall have one-third of the votes cast, and the states together shall have two-third of the votes cast.
The GST council will make recommendations on
a) Taxes, cesses and surcharges to be subsumed under the GST.
b) Goods and services which may be subject to, or exempt from GST.
c) The threshold limit of turnover for application of GST
d) Rates of GST
e) Model GST laws, principles of levy, apportionment of IGST and principles related to place of supply;
f) Special provisions with respect to the North eastern states, Himachal Pradesh and Jammu and Kashmir,and Uttarakhand.
The GST council may decide the mechanism for resolving disputes arising out of its recommendations.
Key Featurs:
The bill enables parliament and state legislatures to frame laws on GST. The GST council, that includes representatives from the centre and all states,will make recommendations on the implementation of GST.
Scope of GST
1. GST is applicable on the supply of goods or services.
2. Alcoholic liquor for human consumption is exempt from GST.
3. Initially GST will not apply to
a) petroleum crude
b) high speed diesel
c) motor spirit (petrol)
d) natural gas, and
e) Aviation turbine fuel.
The GST council will decide when it will be levied on them
4. Tobacco and tobacco products will be subject to GST. The centre may also impose excise duty on tobacco.
Levy of GST:
1. Both parliament and state legislatures will have power to make laws on the taxation of goods and services. A law made by parliament in relation to GST will not override a state law on GST.
2. The central government will have the exclusive powers to levy and collect GST in the course of interstate trade or commerce, or imports. This is known as Integrated GST (IGST).
3. A central law will prescribe the manner in which the IGST will be shared between the centre and states,based on the recommendations of the GST council.
Additional Tax on supply of goods:
An additional tax of upto 1% on the supply of goods will be levied by centre in the course of inter-state trade or commerce. This tax will be collected by centre and directly assigned to the states from where the supply originates.
This tax will be levied for two years, or for a longer period as recommended by the GST council. The central government may exempt certain goods from such additional tax.
The principles for determining the place of origin from where the supply of goods takes place will be formulated by a law of parliament.
Compensation to states:
Parliament may,by law, provide for compensation to states for losses arising out of the implementation of GST, based on the recommendations of the GST council. Such compensation could be for a maximum of five years.
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