GST Introduction | History | States Code | GST Concept | Features | Need | Benefits

  

Eagle Points

• France was the first country to implement GST in the year 1954

• within 62 years, about 160 countries across the world have adopted GST

• Atal Bihari Vajpayee is known as the Father of GST in India

• Late. Arun Jaitley was the first chairman of GST Council at the time of its implementation.

Journey of GST / Chronological Events that have led to GST

2000    Prime Minister introduced the concept of GST and Committee was organised to designed the GST

2003    The Central Government formed a Kelkar Task Force on Fiscal Responsibility and Budget Management (FRBM)

2004    Kelkar Task Force strongly recommended fully integrated GST on national basis

2006    Union Finance Minister P. Chidambaram was announced in Union Budget 2006-07 that GST would be introduced from April, 1, 2010

2008    The Responsibility of Preparing a Designed and Road Map for the implementation of GST was assigned to the Empowered Committee of State Finance Ministers

Sep 2009    Constituted Joint Working Group consisting of Officers from Central as well as State Government

Nov 2009    Empowered Committee of State Finance Ministers (EC) released its First discussion paper on GST

2010    Government launched computerised taxes projects and post-poned GST

17 Dec 2014    Cabinet approved the proposal for introduction of a Constitution (122nd Amendment) Bill in the parliament for amending the constitution of India to facilitate the introduction of GST in the country

19 Dec 2014    The Constitution (122nd Amendment) Bill was introduced in the 16th Lok Sabha by NDA Government

06 May 2015   The Constitution (122nd Amendment) Bill was passed by Lok Sabha

12 May 2015    The Constitution (122nd Amendment) Bill was referred to the select committee of Rajya Sabha

22 Jul 2015    Select Committee had submitted its report on the Bill

03 Aug 2016     The Constitution (122nd Amendment) Bill was passed by Rajya Sabha

08 Sep 2016    The Bill had been ratified by required number of states and received assent of the president

16 Sep 2016    enacted Constitution (101st Amendment) Act, 2016

Sep 2016   First GST council meeting was held

27 Mar 2017    Following Central GST Legislations introduced in Lok Sabha

• CGST Bill, 2017

• IGST Bill, 2017

• UTGST Bill, 2017

• GST (Compensation to States) Bill, 2017

29 Mar 2017    Loksabha passed these Bills

12 Apr 2017    Receipt of Presidents assent and the Bills were enacted

May 2017    GST Council recommended all the rules

30 Jun 2017     Except Jammu and Kashmir, all the states and union territories passed their respective SGST and UTGST

01 Jul 2017   GST Launched

08 Jul 2017   SGST Act passed by Jammu and Kashmir

Place of Supply and Its States Code

• Jammu and Kashmir - 01

• Himachal Pradesh - 02

• Punjab - 03

• Chandigarh - 04

• Uttar Pradesh - 05

• Haryana - 06

• Delhi - 07

• Rajsthan - 08

• Uttar Pradesh - 09

• Bihar - 10

• Sikkim - 11

• Arunachal Pradesh - 12

• Nagaland - 13

• Manipur - 14

• Mizoram - 15

• Tripura - 16

• Meghalaya - 17

• Assam - 18

• West Bengal - 19

• Jharkhand - 20

• Odisha - 21

• Chhatisgarh - 22

• Madhyapradesh - 23

• Gujarat - 24

• Dadra and Nagar Haveli and Daman Diu - 26

• Maharashtra - 27

• Karnataka - 29

• Goa - 30

• Lakshdweep - 31

• Kerala - 32

• Tamilnadu - 33

• Puducherry - 34

• Andaman and Nikobar - 35

• Telangana - 36

• Andhra Pradesh - 37

• Ladakh - 38

Concept of GST

Goods and service tax means any tax on supply of goods or services or both. Except taxes on the Supply of the alcoholic liquor for human consumption.

 

Features of GST

• GST is a value added destination based tax on suppy of goods and services.

• GST brings uniform tax structure all over India - One Nation One Tax.

• GST is a dual model  tax structure.

• GST eliminates cascading effects of tax.

• GST was a  burden borne by the final consumer.

• Import will be treated as interstate supply and IGST will be chargeable along with basic customs duty However export will be treated at zero rated supplies and no IGST is payable.

Need for GST / Issues in Pre-Gst Regime 

• Center and states were separately taxing goods and services and there were many taxes.

• There was multiplicity of rates. Law and procedure. This cause heavy compliance burden.

• Imposition of tax on tax (cascading effect) was another serious problem which leads to inflation.

• Pre-GST there were tax nakas at every inter-state border creating bottlenecks in inter-state transport of goods.

• Tax levied by one government was not available for set-off against the tax levied by another government.

• Double taxation of certain transactions as both goods and services.

• Each state has separate VAT law which had divided the nation into various economic States.

GST - A cure for ills of existing indirect tax regime

GST has been enacted with effect from 1st July 2017 and removed the inefficiencies and complexities of the erstwhile indirect taxation system.

• Taxes levied by different governments (i.e. state and Central) were subsumed in the GST.

• GST eliminates the multiplicity and cascading of taxes which results into overall reduction in tax incidence.

• Removing cascading effects of CENVAT and Service Tax, it can be possible maintain the lower price of that product and will be more demand so increase the turnover of the entity.

• GST is easy to understand and a simple tax structure will bring more taxpayers and in return it will increase the revenue for the government.

• Only one tax needs to be paid under the concept of 'One Nation, One Tax' which is comparatively easy to understand the erstwhile concept of manufacture or Cell of goods or rendering of services.

Above explanation cleared that, GST a cure for ills of existing (i.e pre GST) indirect tax regime.

Benefits of GST

For trade, business and industry

• Easy compliance – automated procedure with greater use of IT (registration, returns, refunds, tax payments).

• Uniformity of tax rates and structures are common across the country.

• Removal of cascading effect of tax

• Reduction in transaction cost lead to an improved competitiveness for the trade and industry

• The subsuming of major control and state taxes in GST

For Central and State Government and Economy

• Simple and easy to administer with end to end IT system.

• GST will result in better tax compliance due to robust IT infrastructure.

• Decrease the cost of collection of tax revenues of the Government and will therefore lead to higher revenue efficiency.

• Boost to make in India initiative.

• Creation of unified National markets.

• Boost to investment, exports and employment.

For the Consumer

• Single and transparent tax proportionate to the value of goods and services.

• The overall tax burden on most commodities will come down which will benefit consumers reducing product price.