Goods and Service Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 6-7-2015 – Goods and services tax is a tax levied on goods and services imposed at each point of sale or rendering of service. Such GST could be on entire goods and services or there could be some exempted class of goods or services or a negative list of goods and services on which GST is not levied. GST is an indirect tax in lieu of tax on goods (excise) and tax on service (service tax). The GST is just like State level VAT which is levied as tax on sale of goods. GST will be a national level value added tax applicable on goods and services. A major change in administering GST will be that the tax incidence is at the point of sale as against the present system of point of origin. According to the Task Force under the 13th Finance Commission, GST, as a well designed value added tax on all goods and services, is the most elegant method to eliminate distortions and to tax consumption. The basic objective of GST is to remov
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rned. The Government has already introduced the Bill to amend Constitution of India for Goods and Services Tax (GST) in December, 2014 in Parliament. GST is expected to play a transformative role in the way our economy functions GST will add buoyancy to economy by developing a common Indian market and reducing the cascading effect on the cost of goods and services. The Budget speech reaffirms the commitment to have GST in place from next year. The Budget speech states – I have already introduced the Bill to amend the Constitution of India for Goods and Services Tax (GST) in the last Session of this august House. GST is expected to play a transformative role in the way our economy functions. It will add buoyancy to our economy by developing a common Indian market and reducing the cascading effect on the cost of goods and services. We are moving in various fronts to implement GST from the next year. Introduction of GST is eagerly awaited by Trade and Industry. To facilitate a smooth tran
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cation cess have been subsumed in excise duty and Service Tax in the present Budget. Further, the general rate of excise duty will be rounded off from 12.36% (including cesses) to 12.5%. In case of Service Tax, it will go up from 12.36% (including cesses) to 14%. The Union Budget focuses on Goods & Services Tax (GST) covering following aspects: State of the art GST regime to be introduced GST likely to be introduced from 1st April, 2016 GST will enable leakage proof tax regime GST to play a transformative role However, no clear cut road map on GST as to how GST will be introduced from 1st April 2016 and preparedness there for. Going by the present mood, the Government of the day feels that it may be able to introduce GST in India w.e.f. 01.04.2016, replacing a host of indirect taxes presently levied by the Centre , State and Local Bodies. It hopes for the parliamentary nod (two-third majority) in the forthcoming monsoon session in July-August, 2015. This is necessary as the Indian
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expected to change the complexion of indirect taxation in India, it will also bring down the prices of goods and services across the board. The consensus among the states (29) and between the Centre and states hold the key. Once consensus is reached, GST may see the light of the day in a year s time, even during any time of the year, it being a transaction based tax. While there is no doubt that GST will come, the sooner the better, it should also address the problems in present day taxation i.e., it should seek to achieve rationalization, boost transparency, offer flexibility to Union and states and broaden the much needed tax base. If GST comes into operation, it would achieve the status of integrated and most comprehensive set off tax structure in India leading to enhanced economic activities and tax buoyancy. GST would offer a complete set off and there will be no tax cascading effect as there will be no tax on tax, an ideal proposition for all. Even the Government won t mind as t
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