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Goods and Services Tax (GST), a historic tax reform, will come into effect from tomorrow i.e.1st July 2017. 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 on the midnight of 30th June – 1st July 2017. The occasion will be graced by the Hon’ble President, Hon’ble Vice President, Hon’ble Prime Minister, Hon’ble Speaker of Lok Sabha and Hon’ble Union Finance Minister among other dignitaries.
The biggest tax reform since independence – GST – will pave the way for the realization of the goal of One Nation – One Tax – One Market. GST will benefit all the stakeholders namely industry, government and consumer. 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 the ‘Make in India’ initiative.
Under 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 the fragmented nature of indirect taxes between the Centre and the States.
GST will make India a common market with common tax rates & procedures and remove economic barriers. GST is largely technology-driven and will reduce the human interface to a great extent. GST is expected to improve the ease of doing business in India.
In the majority of supplies of goods, the tax incidence approved by the GST Council is much lower than the present combined indirect tax rates levied [on account of central excise duty rates / embedded central excise duty rates/service tax post-clearance embedding, VAT rates or weighted average VAT rates, cascading of VAT over excise duty and tax incidence on account of CST, Octroi, Entry Tax, etc.] by the Centre and State(s).
After the assent of the Hon’ble President on 8th September 2016, the 101st Constitutional Amendment Act, 2016 came into existence. The GST Council was constituted on 15.9.2016.
Since its formation, in September 2016 the GST Council has held 18 meetings. The Finance Ministers of all the States or their representative along with State and Central govt officials have participated in these extensive meetings and formulated the law and procedure to implement this historic tax reform.
It was a mammoth task involving 27000+ man hours of intensive work. More than 200 meetings of the officers of the Centre and States took place in different parts of the country to expedite the implementation of GST.
While framing GST Acts and Rules, enhanced ‘Ease of doing business for the taxpayers was a key consideration and accordingly the roles and responsibilities of the States and Central govt have been defined.
In a short span of time, the GST council has cleared GST laws, GST Rules, Tax rate structure including Compensation Cess, Classification of goods and services into different rate slabs, exemptions, thresholds, structure for tax administration, etc.
All the decisions of the Council were taken with consensus. While formulating the Acts and Rules, extensive participatory consultations with trade and industry including other significant stakeholders were undertaken. Feedback was also obtained by posting draft Acts and Rules on the websites and inviting comments from the public.
On 29th March 2017, the Hon’ble Finance Minister of India tabled four Goods and Services Tax (GST) Bills for consideration and passage in the Lok Sabha namely The Central Goods and Services Tax (CGST) Bill, 2017.
The Integrated Goods and Services Tax (IGST) Bill, 2017, The Union Territories Goods and Services Tax (UTGST) Bill, 2017 and the GST (Compensation to States) Bill, 2017. They were passed by the Lok Sabha on 29th March 2017 and by the Rajya Sabha on 6th April 2017.
The GST Council has decided the final structure of GST as follows:
Few things to know before GST rollout. GST will be rolled out from July 1, 2017, and just before its implementation the Govt. had issued various notifications on GST:
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