What is Goods and Services Tax? Understand in 10 points
Why was GST Introduced in India? Understand in 10 easy points
GST is an indirect tax which has replaced several other indirect taxes in India. Good and services act was passed in the parliament on 29th March 2017 and was implemented on 1st July 2017. Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.
1. In India GST was first proposed in the year 2002.
2. July 1 is considered as GST Day as announced by Central Board Of Excise and Customs (CBEC).
3. GST bill was the 122nd Constitutional Amendment bill placed before the parliament and when it was successfully passed it officially came to be known as The Constitution (One Hundred and First Amendment) Act, 2016.
4. GST was implemented under the 279th article of the Indian Constitution
5. Good and service tax was firstly implemented in France.
6. Amitabh Bachchan has been appointed as the brand Ambassador of GST
7. The headquarters of the GST council is in the Indian capital of New Delhi.
8. The council is headed by the union finance minister Nirmala Sitharaman assisted with the finance minister of all the states of India. Chairman N K Singh is the Finance Commision under the panel of GST.
9. The first state to ratify the constitution amendment bill which cleared the way to bring GST Act in India is Assam on 12 August, 2016, While, the first state to pass State GST Bill is Telangana on April 17, 2017
10. The Cabinet has approved a proposal to set up a Special Purpose Vehicle (SPV) namely Goods and Services Tax Network SPV (GSTN SPV) to create enabling environment for smooth introduction of Goods and Services Tax (GST).
11. Currently, businesses with a turnover of up to Rs 20 lakh is exempted from GST registration, while the limit for hilly and north eastern states is Rs 10 lakh.
12. The Goods and ServicesTax (GST) regime has placed the insurance sector under the 18 percent tax
13. India has maximum tax slab@28% as compared to other countries.The country with the highest income tax is Belgium, with an average rate of 39.8%.
2. India’s GST is based and works on Canada model.
14. Goods and Services Tax have 5 tax slabs for collection of tax- 0% tax, 5% tax, 12% tax, 18 % tax and 28%tax. Petroleum products, alcoholic drinks, electricity, and real estate are taxed separately by the individual state governments There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold
15. The biggest reason behind implementing Gst is that it is formulated to create a pan-India tax system and end the number of multiple taxes charged by the Centre and the States on various goods and services.
16. Defaulters/convicts under any offences of GST could be punished up to 5 years of imprisonment
17. At present, there are 31 members in GST council.
Read more: What is the National Human Rights Commission and how does it work?
Major Components of GST are:
- Central Goods and Service Act (CGST) imposed by centre
- State Goods and Service Tax (SGST) imposed by state
- Integrated Goods and Service Tax (IGST) on interstate supply of goods and services.
- The Union Territories Goods and Service Tax (UT GST)
- GST (Compensation to States) ACT 2007
Benefits
- GST has subsumed more than a dozen taxes that existed before the new tax regime. This helps in eliminating the cascading effect of taxes
- Under the GST regime, the threshold for taxpayers has been increased
- Under GST, small businesses can benefit as it gives an option to lower taxes by utilizing the composition scheme. This move has brought down the tax and compliance burden on many small businesses.
- Simplified tax structure with fewer exemptions.
- Higher efficiency with regards to the neutralisation of taxes so that exports are globally competitive.
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