GST BILL EXPLAINED
As the GST bill has been passed now, everyone is interested to know about it. There are questions like What is GST Bill, how will it benefit us etc in our mind. This article will provide you everything you need to know about this bill. We have presented that information in English as well as in hindi. If interested, you can also download the pdf file too.
What is GST Bill ?
The full form of GST is Goods and Service tax. So, it is also called as Good and Service Tax bill. This bill is one of the remarkable changes in India’s Indirect tax changes since the beginning of the economy. GST is a tax levied when consumer buys any good or service. There are three components of GST-
Central GST (CGST) – it will be Levied by Centre
State GST (SGST) – It will be levied by State
Integrated GST (IGST) – It will be levied by Central Government on Intestate supply of Good and Services
Remarkable thing about GST is that it avoids “cascading of taxes”.
ALL ABOUT GOODS AND SERVICES TAX (GST)
How GST is different from other taxes
Currently there are many indirect taxes. We all know about Service Tax, Vat, Luxury tax etc. You can see these taxes whenever you check out from a hotel and whenever you pay the bill at restaurant. The bill they offer to you contains these taxes.
- Now, what GST does is that it combines all these taxes into one, i.e. subsumes all other indirect taxes. It is done for all the Central level and State level taxes.
The nature of GST is that it taxes only the final customer. Hence the cascading of taxes is avoided and production costs are cut down.
Following is the list of the taxes that are subsumed by GST –
Central Level Taxes – Central Excise Duty, Additional Excise Duty, Service Tax, Countervailing Duty and special Additional Duty of Customs
State Level Taxes – State Value Added Tax or Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase tax, Luxury Tax, Taxes on Lottery, Betting and Gambling
So, this means that GST clubs almost all indirect taxes together that are levied by central and State Governments.
ADVANTAGES OF GST BILL –
Introduction of GST will bring following benefits –
Multiple Taxation is removed
Goods and Services are taxed at same rate
Taxes on the Manufacturers are reduced
It helps in the seamless flow of credit in the country
In single line we can say that GST will simplify administration, improve compliance, remove distortions in production, trade and consumption
Although there are noticeable benefits of GST, it doesn’t mean that it is perfect. There are some disadvantages too, which can’t be ignored –
The tax on services would go from 14 to 20% after the implementation of GST
The Tax on retails will almost get doubled
The tax on imported Goods will be around 6%
There will be control on every system by the Central and State Governments
Exclusions in GST
Following products are excluded from GST –
Source: Pradhan Mantri Yojana