Lok Sabha on Wednesday passed four important legislations which are expected to launch the ‘Goods and Services Tax’ – GST Bill from 1st of July this year.
- The GST has been billed the biggest reform post-independence. When the ‘one nation one tax’ regime starts, it would be a huge boost to the National Democratic Alliance (NDA) and Prime Minister Narendra Modi. The GST would also see a drop in the prices of many Fast Moving Consumer Goods (FMCG).
- The GST will subsume the Central Excise, Service Tax, Value Added Tax (VAT) and other local taxes to create a uniform market across the country. GST is also expected to have a buoyant effect on India’s Gross Domestic Product (GDP) growth rate.
- Analysts feel that GST could boost India’s GDP by two percent.
- Voting took place in the Lok Sabha late on Wednesday for the passage of the Central GST Bill, the Integrated GST Bill, Compensation GST Bill and the Union Territory Bill.
- Now, the 29 states and the two Union territories which have a sitting legislature (Delhi and Puducherri) will have to ratify the fifth important GST legislation, the State GST Bill.
- Allaying the fears of some of the Members on the landmark legislation, Finance Minister assured the House that the States and the Centre have pooled their sovereignty in the GST Council.
- The recommendation of the rates will come from the Council. The States have two thirds vote in the GST Council and only one third voting is enjoyed by the Centre. The GST Council has been authorised to only make a recommendation regarding the model law.
- The Finance Minister said the GST was likely to make a large number of commodities ‘slightly cheaper’. He also said that by doing away with the concept of ‘tax on tax’, the GST would help in curbing inflation. Mr. Jaitley informed the House that the GST Council was working on the basis of consensus and all items would come under the ambit of the new indirect tax regime.
- Despite feeling that they are not yet prepared to embrace the new tax regime, traders in India have come forward as a partner with a unique plan to help government achieve its goal.
Central Association if Indian Traders (CAIT), an umbrella body of trade and business associations, has planned to launch ‘Mission GST’ — a national campaign in which the confederation plans to train 5,000 trade leaders from all across the country as ‘master trainers’.
- “The GST will be rolled out in the next 90 days. Keeping this target in mind, the master trainers will empower and educate the trading community on various aspects of GST across the country. CAIT has roped in tax practitioners, chartered accountants and consultants in this drive. The aim is to provide training to traders, right from state capitals to tehsils,” said a statement by the CAIT.
While, GST is an e-compliance taxation system and altogether different from current tax regime, nearly 70 percent of traders don’t have computers and they go in for manual accounting. Now they have to adopt digital technology.