Centre to undergo trying times to implement GST from April next
New Delhi: Although the Goods and Services Tax (GST) constitutional amendment Bill has been backed and accepted by 21 Indian states, it will have to go through many 'ups and downs' to be brought into effect. Rising above all the related issues, the Centre is planning to finally bring the ‘flat tax system’ into being from April 1, 2017 across the country.
According to the Ministry of Finance, the Bill will have to cross five major hurdles ahead of being operative. “Further proceedings to bring the Bill into effect will begin from the next week as the formation of GST council will be cleared by the Finance Ministry,” said an official source.
Moreover, the government is required to pass more amendment Bills in the next winter session before bringing the GST Bill into effect.
What is a Goods and Service Tax (GST) Bill:
The GST Bill, officially known as ‘The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014’, proposes a Uniform tax regime to be implemented in India. There will be uniform 18 per cent tax throughout the country if the amendment is finally made.
The government has proposed the plan ion three parts, namely ,the Central GST that will include all the taxes that countrymen pay to the Central government (for example: Excise duty), State GST that includes all the taxes that are imposed by the state government (such as royalty of Coal mines) and Integrated GST which will include all payable taxes that are proportionately distributed between the Centre and the state governments.
According to the bill presented by government in Lok Sabha, the new amendment will free the nation from unnecessary twenty-odd types of taxes and will replace them with a single tax system that would mitigate cascading or double taxation and facilitate a common national market.
Central taxes That The GST will replace:
- Central Excise Duty
- Duties of Excise (medicinal and toilet preparations)
- Additional Duties of Excise (goods of special importance)
- Additional Duties of Excise (textiles and textile products)
- Additional Duties of Customs (commonly known as CVD)
- Special Additional Duty of Customs (SAD)
- Service Tax
- Cesses and surcharges in so far as they relate to supply of goods or services
State taxes that The GST will subsume:
- State VAT
- Central Sales Tax
- Purchase Tax
- Luxury Tax
- Entry Tax (all forms)
- Entertainment Tax (not levied by local bodies)
- Taxes on advertisement
- Taxes on lotteries, betting and gambling
- State cesses and surcharges
- The Ministry of Finance and the centre are progressively working to bring the GST bill into effect.
- There is still a difference of opinions among the Centre and state governments about the flat tax system.