The midnight of Jun 30-July 01 2017 saw history in the making. Though the midnights of 2017 and 1847 are not comparable in euphoria of freedom, but, the setting, the high domed Central Hall of Parliament was virtually recalling history with a Prime Minister and President present in the august precincts. The time it was economic freedom, if it was political emancipation then.

The government of India, following in the credo of “One Nation and One Tax”, and wanting an unified market that could make the movement of goods freer across the country making life easier for manufactures, producers and investors.

The new tax that seeks to usher in a uniform indirect tax regime will not lead to inflation as apprehended by some sections, the Finance Minister has stated. Successive governments have contributed towards GST and no none person can take credit for it. The bills were cleared by the Rajya Sabha after negation of a host of amendments moved by the opposition parties. The Lok Sabha had passed these bills on March 29. In mid-May the government gave final approval to rules and rates.

The implement GST, Parliament had cleared the (1) Central GST Bill, 2017; (2) The Integrated GST Bill, 2017; (3) The GST (Compensation toStates) Bill, 2017; (4) The Union Territory, GST Bill, 2017.

GST will be levied on all transactions such as sale, transfer, purchase, barter, lease, or import of goods and/or services. India will adopt a dual GST model, meaning that taxation is administrative by both the Union and State Governments. Transactions make within a single state will be levied with Central GST (CGST) by the Central Government and State GST (SGST) by the government of that state. For inter-state transaction and imported goods or services, an Integrated GST (IGST) is levied by the Central  Government.

As a parallel development, a “Goods and Services Tax” Network (GSTN), a non-profit organization has been formed to create a platform for all the concerned parties i.e. stakeholders
government, taxpayers to collaborate on a single portal. The portal will be accessible to the central government which will track down every transaction at its end while the taxpayers will be having a vast service to return/file their taxes and maintain records. The IT network will be developed by private firms which will tie up with the central government and will take its share of stake accordingly. The known authorized capital of GSTN is Rs. 10 crore (US$1.6 million) in which Central government holds 24.5 percent of shares while the state government holds 24.5 percent and rest are with private banking firms.

Study Material for IAS (UPSC) Pre 2018

Shake Up Corporate Entities and their  Operations: How?

The new tax regime will force many companies to restructure their operation. Companies will now insist to vendors and suppliers to furnish invoices as GST will make it impossible for firms to evade taxes. Big companies stand to benefit as they have a supply chain in order and can offset taxes paid on inputs. Smaller firms may end up sending more as compliance cost will rise. “While the impact on companies varies following existence of production units in the excise exempted zones, implementation of GST should result in cost savings in the supply chain network and expedite a shift from unorganized to organized trade,” a foreign brokerage firm Jefferies is quoted as saying in the media.

In terms of GST effect on the government’s revenue kitty, it seems to be on the wait and watch mode. Services, including banking and telecom, get more expensive, as also purchase of
flats, ready-made garments, monthly mobile bills and tuition fees. In the GST regime buying a flat or shop, will attract 12 percent tax as compared to current six per cent approximately. Foreign investors have welcomed the GST as it makes it easier for them to manufacture and move their commodities in a freer manner as most of the states have dismantled their check posts and gates.

In conclusion, GST in a 2nd major surgical strike on tax evaders, brings most traders into the tax net, makes movement of commodities freer in the country, attracts foreign investors
with a unified market with a single tax, though it has inconvenienced citizens on a spending spree with inf lated bills, on wining and dining, travelling, property purchase etc. But GST on 81
percent of the commodities is expected to make them cheaper. A long term benefit with short term suffering as the country shifts to a new taxation regime. It’s but natural.

Complete Study Material For UPSC Exam 2018, 2019

This is Only Sample Material, To Get Full Materials Buy The Gist 1 Year Subscription - "Only PDF" Click Here

Click Here to Download More Free Sample Material

Go Back To Main Page

Courtesy: Yojana