The goods and services tax (GST) implementation marked the beginning of the indirect tax reform system in the country. Eliminating the cascading effect of taxation and double taxation is the important benefit of GST. Several countries such as Australia, Singapore and Canada have already established GST even before the year 2000.
Evolution of GST in India
● Atal Bihari Vajpayee was the first person to suggest adopting GST to the government in the year 2000. The finance minister of the state formed an empowered committee to create a structure for GST.
● The advisor to the finance ministry Vijay. L. Klekar headed a task force that proposed a nationwide implementation of fully integrated GST in 2004.
● April 1st 2010 was announced as the launch date for GST by the Union minister. With different political opinions the GST launch date was delayed.
● In 2014 the constitutional (122nd amendment) bill 2014 was submitted by the new finance minister Arjun Jaitley. And the bill was passed in the Lok Sabha in may 2015.
● In August 2016 the bill was passed in Rajya Sabha after incorporating the recommendations from the committee.
● After the approval of the president of India and with the number of ratifications by the state government the constitution act 2016 came into force.
● The lok sabha passed the central legislations on August 2017 they are:
1. GST bill of 2017
2. IGST bill of 2017
3. UTGST AND SGST bill of 2017
4. GST compensation bill of 2017
The GST implementation date was set on 1st July 2017.
Tax structure before the implementation of GST
Before the implementation of GST there were different taxes for different purposes such as excise duty, customs duty, service tax, central sales tax, state – level VAT etc. After the implementation, now GST will replace all of these taxes.
GST Council
A GST council has been set up with the union finance minister as the chairperson. The significant decisions taken by the council are :
● State tax administration has the control over 90% of the taxpayer with turnover less than 1.5 crore and 10% control would be with central tax administration.
● The four taxes under GST are 5%, 12%, 18% and 28% with some goods exempted from GST.
● The peak rate of above 28% will be levied on certain luxury goods.
The GSTN(Goods and Service tax network) was set up as a private company by the government to provide services to taxpayers such as registration, payments and returns. While registering for GST the consent letter for gst registration is mandatory if the taxpayer is conducting business in a rented place. You can click here for gst certificate download by gst number.
Benefits of GST
● Cascading of taxes is eliminated
● Multiple taxes and double taxation is eliminated
● Increased Government revenue
● The reduction in compliance costs
● GST introduced a single tax system
Conclusion
With the implementation of GST there has been an increased economic activity and investment. GST solved all the pre-GST issues in the tax regime which benefited the suppliers as well as the customers.
