Know the key benefits of GST Bill
Government plans to push the Constitution Amendment Bill in the Rajya Sabha for roll-out of Goods and Services Tax (GST) in the Monsoon session.
Zee Media Bureau
New Delhi: Government plans to push the Constitution Amendment Bill in the Rajya Sabha for roll-out of Goods and Services Tax (GST) in the Monsoon session.
What is GST
GST stands for Goods and Services Tax and it is being touted as the most significant reform in indirect tax since independence.
The GST will subsume all indirect taxes such as excise duty, service tax and sales tax into one uniform rate. By subsuming most indirect taxes levied by the central and state governments GST regime proposes to facilitate a common market in the country.
As a measure of support for the states, petroleum products, alcohol for human consumption and tobacco have been kept out of the purview of GST.
But it should be kept in mind that only the Centre may levy and collect GST on supplies in the course of inter-state trade or commerce.
The tax collected would be divided between the Centre and the states in a manner to be provided by parliament, on the recommendations of the GST Council.
How will GST benefit India
- The final consumer will bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.
- Finance minister Arun Jaitley had earlier said that GST will be beneficial to the Centre, states, industrialists, manufacturers, the common man and the country at large since it will bring more transparency, better compliance, increase in GDP growth and revenue collections.
- Logistics firms believe that GST will them and result in lowering the product prices by up to 10 percent.
- GST will also generate positive growth for sectors like auto, consumer durables and fast-moving consumer goods (FMCG) while prompting these sectors to pass on impact of lower taxes on goods to consumers.
- House construction is covered under GST. So GST will apply on purchase of under-construction property.
- GST would help unify the market, lower incentive to use tax system loopholes, widen tax base apart from improving the productivity of the overall economy. GST would help the transportation sector in improving its efficiency besides reducing the logistics cost, Roland Berger Strategy Consultants Managing Partner Wilfried G Aulbur had said.