One year of GST July 1
One year of GST
July 1, 2018 marks one year of the launch of Goods and Service Tax in India. The policy aims to streamline the taxation structure in the country by doing away with various taxes imposed by states and Centre and introducing a unified tax system.
What is Goods and Service Tax?
GST is a destination-based tax and is levied at the final consumption point. Under the new tax regime, the final consumer of the goods and services will have to bear the tax charged in the supply chain. Manufacturers and dealers can later claim a refund.
When were the bills passed?
Four bills related to the GST were tabled in the Parliament. The Central GST, Integrated GST, Union Territory GST and the Compensation Law were passed in March in Lok Sabha. The Upper House passed the bills in April.
Various slabs of GST
The GST Council that includes Union Finance Minister and his counterparts from different states, rolled out four different slabs for the new tax regime. The slabs have been set at 5 per cent, 12 per cent, 18 per cent and 28 per cent for different items or services.
Essential items like food, milk, flour, eggs are taxed at zero rate. Essential items are pegged at 5 per cent while luxury goods are taxed at 28 per cent. After the introduction of GST, the council has shifted multiple items from the top tax bracket of 28 per cent to 18 per cent to shore up public spending and revive investor sentiment.
States that opposed Goods and Service Tax
Textile traders and diamond traders took to the streets to voice their protests. Sweet shop owners in West Bengal had also protested against the imposition of five per cent GST on products
Jammu and Kashmir was the last state to join the tax regime.
Items excluded under GST
Alcohol and petroleum products have been kept outside the purview of GST for the moment. Petroleum Products such as petroleum crude, motor spirit (petrol), high-speed diesel, natural gas and aviation turbine fuel etc are charged as per the previous tax structure. GST is also not applicable on electricity. However, now government i mulling to bring petrol under GST in order to combat the rising fuel prices. “I have already categorically stated this issue several times. The present oil price hike is due to three main factors — hike in the international price of crude, fluctuation in the dollar and Indian currency ratio and some of the tax issues are also there. For long-term solutions, government of India is planning for a holistic strategy.
First GST Council meet
GST Council is the key constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax. The GST Council is chaired by the Union Finance Minister and it comprises of the Union State Minister of Revenue and Finance and Ministers in-charge of Finance or Taxation of all the States of India.