India

GST to be tabled with 1% tax drop

03 Aug 2016 | By Vaneet Randhawa
The Goods and Services Tax

The government has distributed official amendments to the GST bill and this includes Congress' demand to drop 1 percent additional manufacturing tax.

It also included providing a specific provision in the law for recompensing states for income loss for 5 years as the Government tables GST in Rajya Sabha on 3rd August.

GST Council will also set a mechanism for adjudication of conflicts.

In context: The Goods and Services Tax

The Goods and Services Tax Bill

The Goods and Services Tax is a comprehensive, indirect tax on the manufacture, sale and consumption of goods, paid by the consumer - the last person in the supply chain.

FeaturesHighlights of the Goods and Services Tax

The Goods and Services Tax Bill is best known for eliminating the multiplicity of taxes, rates, exemptions and exceptions.

It achieves a uniformity in taxes across territories, regardless of place of manufacture or distribution.

The GST will ensure tax compliance throughout the country.

It will also lead to an improvement in the international cost competitiveness of native goods and services.

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Impacts of the GST on Corporates and the Economy

BenefitsImpacts of the GST on Corporates and the Economy

The GST will reduce the average tax burden and production costs incurred by companies.

This will benefit the corporates as the exports will become more competitive.

It will also simplify tax structure, broaden the tax base and create a common market across states.

This will lead to an increase in tax compliance and will increase India's tax to gross domestic product ratio.

MP's ViewsWhat the members of Rajya Sabha have to say

MP Bhartruhari Mahtab from the BJD said, "We are in favour of the bill. We support it."

Rajya Sabha MP of TDP, T Devender Goud, said, "If it benefits the country, we will definitely support it."

Sanjay Raut from Shiv Sena, a Rajya Sabha MP said, "There is no opposition to GST. We have submitted a memorandum on our demands to the government."

03 Aug 2016GST to be tabled with 1% tax drop

International ScenarioGoods and Services Tax around the world

In the 1954, France became the first country to adopt the GST. Today, more than 140 countries have implemented it.

Brazil and Canada follow a dual system where both Union and State Governments levy GST.

GST in China is applicable only to goods and the provision of repairs, replacement and processing services.

The U.S does not have a national level VAT.

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Exclusions from the GST

Petroleum products like crude, motor spirit (including aviation turbine fuel), high speed diesel, alcoholic beverages and tobacco have been proposed to be kept out of GST.

03 Aug 2016Rajya Sabha approves GST bill: Better late than never

The GST bill became a law as the Rajya Sabha approved the bill.

The upper house approved 6 amendments, this included forsaking 1% additional tax.

The new law will now subsume all indirect taxes which will cover central excise duty and state VAT/sales tax.

The bill will return to the Lok Sabha to include the amendments ratified by the Rajya Sabha.

05 Aug 2016Finance Ministry firm on rolling out GST on 1st April

On 4th August, 2015, the Finance Ministry assured everybody about its firm intent to roll out GST by 1st April, 2017.

It also put to rest fears that GST will have an impact on inflation despite the 20% rate.

Finance Minister Arun Jaitely, along with junior ministers and top bureaucrats, told the media that a detailed roadmap to meet the deadline was ready.

09 Aug 2016Amended GST Bill gets an all-clear from Lok Sabha

The biggest taxation reform in the country, Goods and Services Tax, is not far from becoming an Act.

On 8th August, 2016, 11 years after the Bill was first introduced by the then Finance Minister P.Chidambaram, Parliament passed the amended GST Bill.

443 members present in Lok Sabha all voted in favour, except for AIADMK, who walked out before the voting could begin.

20 Aug 2016Tax evasion and low taxes cannot co-exist: Jaitley

Union Finance Minister Arun Jaitley stated that tax evasion and low tax rates cannot co-exist.

He was responding to a question in parliament seeking to reduce the GST rate from 18% to 17%.

Jaitley stated that tax evasion in India has reduced the country's tax revenue, forcing higher taxation rates.

He stated that until all citizens pay taxes on time, rates will be high.

23 Aug 2016GST likely to be pushed to 2017

The government is considering pushing the GST roll-out to mid-2017 instead of April 1, as the full scale implementation of GST would take more time.

Sources said that after it is passed by the budget session of parliament, industry bodies have little or no time to adapt to the changes.

Industry officials have asked for 6 months preparation time after the GST is finalised.

25 Aug 2016CII: GST on processed foods must be low or 0

The Confederation of Indian Industry has stated that the GST rate on processed foods must be low or 0.

CII said that the country cannot afford to have high taxes, considering the fact that food inflation is already over 6 percent.

It added that unless such steps are implemented, the benefit of processed foods prices will not reach the consumers.