Daily Facts IAS 07-Sep-2016 - Vetrii IAS Academy

VETRII IAS ACADEMY Old No.52, New No.1, 9th Street, F Block, 1st Avenue Main Road, Near Istha siddhi Vinayakar Temple, Anna Nagar East, Chennai – 600 102.

Phone: +91 (44) 26265326 Mobile: +91 9600124042, 9840097666 http://www.vetriias.com

Daily Facts IAS Exam Dated: 07­Sep­2016

GOODS AND SERVICES TAX Goods and Services Tax is a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India, to replace taxes levied by the central and state governments. India took giant step in structural indirect taxation reform and paved way for the concept of one nation, one tax.

GOOD AND SERVICES TAX

The Constitution (122nd Amendment) Bill, 2014 was introduced in the Lok Sabha by Finance Minister Arun Jaitley on 19 December 2014, and passed by the House on 6 May 2015.

Features of GST • Single tax on supply of goods and services, right from the manufacturer to the consumer • It is a destination based tax unlike the present taxation scheme which is origin based • It is a value based tax as credits of input taxes paid at each stage will be available in the subsequent stages • The final consumer will bear only the GST charged by the last dealer in the supply chain Following taxes are being included under GST at the central level • Central Excise Duty • Additional Excise Duty • Service Tax • Countervailing Duty • Special Additional Duty of Customs Following taxes are being included under GST at the state level • Central Excise Duty • State VAT/Sales Tax • Entertainment Tax • Central Sales Tax • Octroi and Entry Tax • Purchase Tax • Luxury Tax • Taxes on lottery, betting and gambling GST with state ratification The Act was passed in accordance with the provisions of Article 368 of the Constitution, and has been ratified by more than half of the State Legislatures, as required under Clause (2) of the said article. On 12 August 2016, Assam became the first state to ratify the bill, till now (06­09­2016) 18 states are approved GST bill.

GOOD AND SERVICES TAX

Features of 122nd GST BILL • Conferred simultaneous power upon Parliament and State Legislature to make laws governing GST • Subsuming Central and State taxes under GST as described above • Levy of GST on inter­state transactions of goods and services • GST on all goods and services except alcoholic liquor. Petroleum and petroleum products shall be subjected to the levy of GST on a later date as decided by the GST Council.

• GST Council, a constitutional body, created with 2/3rd representation from states and 1/3rd from centre to examine issues related to GST and make recommendation on rates, taxes, cesses, surcharges, exemption list, dispute resolution etc. All decisions in GST Council to be taken by 3/4th members. It will function under the chairmanship of Union Finance Minister • Compensation to states for the entire amount of revenue losses for 5 years MERITS: Industry AND Business • Easy compliance as one tax to be paid • Creation of one market which will facilitate Ease of Doing Business in India • Removal of cascading taxes which will lower price, thereby boosting demand.

• Improve competitiveness as the transaction cost for doing business would reduce.

• All the above advantages are expected to provide a boost to the ambitious Make in India programme of the government Consumers • No cascading burden of taxes which would moderate inflation • More transparency in taxation regime and easier to understand for the customers Government • The new taxation regime will be easier to administer for the government • Better control on leakages due to lesser evasion • Higher revenue efficiency

References: https://en.wikipedia.org/wiki/Goods_and_Services_Tax_Bill http://www.cbec.gov.in/htdocs­cbec/gst