GST Explained with Examples

Brief Intro: Introduction of Goods and Services Tax (GST) will indeed be an important perfection and the next logical step towards a widespread indirect tax reforms in India. As per, First Discussion Paper released by the Empowered Committee of the State Finance Ministers on 10.11.2009, it has been made clear that there would be a “Dual GST” in India, i.e. taxation power lies with both by the Centre and the State to levy the taxes on the Goods and Services.

The scheme was supposed to be implemented in India from 1st April 2016, however it may get delayed since the NDA government does not have majority in Rajya sabha (‘The upper house of parliament’ or ‘the house of states’).

Further, Punjab and Haryana were reluctant to give up purchase tax, Maharashtra was unwilling to give up octroi, and all states wanted to keep petroleum and alcohol out of the ambit of GST. Gujarat and Maharashtra want the additional one per cent levy extended beyond the proposed two years, and raised to two per cent. Punjab wants purchase tax outside GST.

Constitutional Amendment: 

Concepts in GST

Benefits of GST

1.         One Tax

2.          Common Market

3.          Distinction Between Goods and Services will go

4.         Invoicing will be Simpler

5.         No Entry Tax

6.         Common Exemptions between Centre and State

7.         Big Central Excise Tariff Will Go

8.         Concept of Manufacture will go

9.         Classification Controversies will go

10.     Problem of Identification will go

11.     Undue Enrichment Law will go

12.     Zero Rating will be more Comprehensive & More Easy

Components of GST

 CGST

— It would be levied by the Centre

 SGST

— It would be levied by the States

Highlights of GST Bill Passed by Lok Sabha

Lok Sabha passes GST Constitutional Amendment Bill with 2/3 majority

Amid stiff resistance followed by walk out by the Congress Members, the Lok Sabha , on May 6, 2015 has passed the much awaited Constitutional (122nd Amendment) Bill, 2014 on Goods and Services Tax (GST) with 2/3rd majority.

The Hon’ble Finance Minister, Mr Arun Jaitley, has indeed been working hard for the smooth passage of the GST Constitutional Amendment Bill tabled in the last session of the Parliament in December, 2014 [calling it the “Single biggest tax reform since Independence”], but he was taken aback by the sudden vociferous stand coupled with aggressive and brisk walk-out from the House by the main Opposition Party.

About GST Bill

GST Bill

Lok Sabha has finally passed the GST Amendment Constitutional Bill on 5th May 2015 .

The GST Bill no. 192 of 2014 will result the 122th amendment in Constitution of India

GST is an indeed path breaking tax reform since 1947 in India .

Goods and Service Tax (GST) in India can be soon a reality in 2016 .But, the April factor seems doubtful and more realistic time can be anywhere between August to October 2016.

GST Bill Vs Rajya Sabha Via State Assemblies

GST threshold set at Rs 10 lakh

Traders with a turnover below R10 lakh a year won’t have to register for or pay the goods and services tax (GST), and those with annual sales of R10 lakh to R50 lakh will need to pay the tax at a rate lower rate than the standard GST rate, official sources told FE.

The concessional tax rate would, however, not be available for traders making interstate transactions irrespective of their turnover, they said. The quantum of concession will be decided by the proposed GST Council which will also determine the standard GST rate. The threshold levels were finalised by the empowered committee of state finance ministers that met here for the second consecutive day on Friday.