Prime Minister Narendra Modi on Sunday said that the Goods and Services Tax (GST) Bill will help India to achieve financial equality, stating it to be important for India. The government’s main aim is to get “Jan Dhan Yojana” and its tax regime that will help in achieving its objectives, and it’s further goal’s
Goods and Services Tax” would be a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India, to replace taxes levied by the central and state governments. Goods and Services Tax would be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method. This method allows GST-registered businesses to claim tax credit to the value of GST they paid on purchase of goods or services as part of their normal commercial activity. Taxable good’s and service’s are not distinguished from one another and are taxed at a single rate in a supply chain till the goods or services reach the consumer. Administrative responsibility would generally rest with a single authority to levy tax on goods and services only.
The new Goods and Services Tax (GST) would be a significant step in the reform of indirect taxation in India. The simplicity of the tax should lead to easier administration and enforcement. From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%. Now there will be free movement of goods from one state to another without stopping at state borders for hours for payment of state tax or entry tax and reduction in paperwork to a large extent. Eventually they will take less time to get the product to the consumer, that mean’s consumer’s will get their product’s before they except it , because their will be less of paper work and less of legal formalities.
What changes there would be if India launches GST- “The tax rate under GST may be nominal or zero rated for the time being. It has been proposed to insulate the revenues of the States from the impact of GST, with the expectation that in due course, GST will be levied on petroleum and petroleum products. The central government has assured states for compensation for any revenue losses incurred by them from the date of introduction of GST for a period of five years.
GST would be implemented by the central government and by state government. Given the passage of the Constitution Amendment Bill for Goods and Services Tax (GST) in the Rajya Sabha on 3 August 2016, the Government of India seems committed to replace all the indirect taxes levied on goods and services by the Centre and States and implement GST by April 2017.