Important features and benefits of GST bill in India 2017

Important features and benefits of GST bill in India 2017

What is GST bill in india?

GST stands for Goods and Service Tax. It is an indirect tax on manufacture, sale and consumption of goods and services at national and state level. It is introduced to replace multiple indirect taxes and services like State VAT, central Sales Tax, Entertainment and amusement Tax, Entry Tax, Purchase Tax, Luxury Tax, Tax on Betting, Lottery and gambling by the Indian state and central government.GST is consumption based tax, it means that the state in which final sale to consumer is made to entitled to get the tax. GST is applicable to all goods other than crude petroleum, motor spirit, diesel, aviation turbine fuel and natural gas.

What are the individual taxes which are replaced by GST?

GST would replace following taxes

a) Taxes currently levied and collected by Central Government

Central Excise duty

Duties of Excise - medicinal & toilet preparation

Additional Duties of Excise - Goods of Special Importance

Additional Duties of Excise – Textiles & Textile products

Additional Duties of Customs (CVD)

Special Additional Duties of Customs (SAD)

Service Tax

Central surcharges and cesses so far as they related to supply of goods and services

b) Taxes currently levied and collected by State Government

State VAT

Central Sales Tax

Luxury Tax

Entry Tax

Entertainment and Amusement Tax

Taxes on Advertisement

Purchase Tax

Taxes on lotteries, betting and gambling

State surcharges and cesses as they related to supply of goods and services

Administration of GST in India

There will be two components of GST 

CGST (Central Goods and Service Tax)

SGST (State Goods and Service Tax)

As per the bill Additional Tax not exceeding 1% on the supply of goods during inter state trade should be collected by the centre.

Such additional tax shall be directly assigned to the states from where the supply originates. This would not be a part of the Consolidated Fund of India (except for the amounts due to the union territories).

This shall be implemented for a period of two years, or as recommended by the GST Council. The centre may exempt certain goods from its purview and formulate principles for the determination of place of origin related to supply of good.

The Bill proposes that the GST Council shall recommend for setting up of an Integrated GST (IGST). the centre may levy and collect GST on supplies in the course of inter-state trade or commerce. The tax collected would be divided between the centre and the states as per law.

GST will replace a multiplicity of taxes on goods, like excise duty on indigenous manufacture and on imports, VAT, CST, purchase tax, entry tax, and various cesses and surcharges. It will also replace entertainment tax (other than by local bodies), luxury tax, taxes on advertisements and taxes on lottery, racing and gambling. Furthermore, GST will be available as input tax credit.

The levy of GST will be simultaneously made on the same transaction by the states and central. Consequently, the taxable value will be the same for the purpose of both state & central GST.