GST rollout – complete transformation of Indirect Taxation

Speed Post News Network

New Delhi : Goods and Services Tax (GST), a historic tax reform, will come into effect from July 1, 2017. The GST will completely transform the Indirect Taxation landscape in the country involving both the Central and State levies. In a departure from the normal practice, GST will be administered together by the centre and states.

To commemorate the historic occasion, a function will be held in the Central Hall of Parliament in the midnight of June 30, 2017. The occasion will be graced by the President, Vice President, Prime Minister, Speaker of Lok Sabha and Union Finance Minister among other dignitaries, according to a PIB release.

The biggest tax reform since independence, the GST will pave the way for realization of the goal of One Nation – One Tax – One Market. It will benefit all the stakeholders namely industry, government and consumers. It will lower the cost of goods and services, give a boost to the economy and make the products and services globally competitive giving a major boost to ‘Make in India’ initiative, according to the PIB release.

In the GST regime, exports will be zero-rated in entirety unlike the present system where refund of some of the taxes does not take place due to fragmented nature of indirect taxes between the centre and the states. GST will make India a common market with common tax rates and procedures and remove economic barriers. GST is largely technology driven and will reduce the human interface to a great extent. It is expected to improve ease of doing business in India, said the release. After the assent of the President on September 8, 2016, the 101^th Constitutional Amendment Act, 2016, came into existence. The GST Council was constituted on September 15, 2016.

The threshold limit for exemption from levy of GST is Rs. 20 lakh for the states except for the Special Category, where it is Rs 10 Lakh. A four slab tax rate structure of 5%, 12%, 18% and 28% has been adopted for GST. A cess would be levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the GST rate of 28% for payment of compensation to the states. GST envisages all transactions and processes to be done only through electronic mode, to achieve non-intrusive administration.  This will minimise tax payers physical interaction with the tax officials.