Much awaited Goods and Services Tax Bill got green flag by the Union Cabinet made it’s way to be tabled before the Parliament for approval.
Goods and Services Tax is a unified taxation system under which all the taxes currently imposed by central government and state government will be subsumed within GST.
Here are the few features of the proposed Goods and Services Tax Bill:
1. The Goods and Services Tax Bill (GST) will simplify the cumbersome indirect taxation by cutting down the large number of taxes imposed by Central and State Governments such as entry tax, service tax, CST etc.
2. GST would result in bringing down the evasion of tax and burden on the consumers as the levy of tax will be only at the point of sale and only on the value addition.
3. Currently, petroleum products are not included in the GST regime and thus, taxation of the petroleum products lies with the Central Government.
4. Alcohol will be exempt from GST and States will be free to decide to levy their own charges/taxes.
5. The Central Government will compensate the losses of the State for the first five years in a manner of 100% for first three years, 75% for fourth year and 50% for the fifth year.
6. The implementation of GST requires at least half of the States in favour besides Parliament.
7. The Goods and Services Tax is proposed to be made applicable from April 2016 after the delay of nearly 7 years.
8. Experts and Economists favours the Goods and Services Tax as it will boost the GDP by 2 percentages.
9. The Indirect tax collection may also go up to 12% of GDP from current collection of 5%.