Upper House passes Goods and Services Tax (GST) bill

Story By: Rajesh Sharma
Thursday, August, 04 2016 - 11:59

The Rajya Sabha (Upper House) on Wednesday passed the much-awaited Goods and Services Tax (GST) bill with 203 votes in favour. 

The Rajya Sabha passed the constitutional amendment by two-thirds majority, as all parties, except the AIADMK, pledged support. 

The Goods & Services Tax (GST)  is a one indirect tax for the whole nation, which will make India one unified common market. 

The constitutional amendment will enable both the Centre and the States to simultaneously levy the GST, which will subsume all indirect taxes currently levied, including excise duties and service tax. 

The Empowered Committee of State Finance Ministers has recommended what all taxes are to be subsumed in the GST:

In the Central taxes: 1) Central Excise Duty; 2) Additional Excise Duties; 3) The Excise Duty levied under the Medicinal and Toiletries Preparation Act Service Tax; 4) Additional Customs Duty, commonly known as Countervailing Duty (CVD); 5) Special Additional Duty of Customs - 4% (SAD); 6) Surcharges, and 7) Cesses.

Among the state taxes and levies: 1) VAT / Sales tax; 2) Entertainment tax (unless it is levied by the local bodies); 3) Luxury tax; 4) Taxes on lottery, betting and gambling; 5) State Cesses and Surcharges in so far as they relate to supply of goods and services; and 6) Entry tax not in lieu of Octroi.

In other words, GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer bringing down the end price.

With the new amendments, the final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.

The GST bill is India's biggest tax reform since independence. 

The government target for the tax coming into effect is April 2017.


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