How to transition your business from traditional taxation to GST
The goods and services tax (GST), a multi-level value added tax, was first introduced in Canada on January 1, 1991, by then-Prime Minister Brian Mulroney and his finance minister Michael Wilson. Presently, there are around 160 countries that have implemented GST/VAT in some form or other.India introduced the concept of GST in the Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014 presented at Lok-Sabha by Finance Minister Arun Jaitley on 19 December 2014. The GST bill was passed by Lok Sabha on 6 May 2015. When the GST bill was submitted in Rajya Sabha, the bill was referred to a Select Committee on 14 May 2015. The GST got the approval from Select committee and the bill was passed IN Rajya Sabha on April 2017. The government is in course of implementing GST by July 2017.
GST is proposed to be a comprehensive indirect tax to be levied on manufacture, sale and consumption of goods as well as services at the national level. It will substitute all indirect taxes levied on goods and services by the Central and State Governments in India as of now. The 14 central as well as state or local indirect tax regimes which are replaced by GST are:
- Excise Duty
- Service Tax
- Counter Vailing Duty (CVD)
- Special Additional Duty of Customs (SAD)
- central charges and cesses
- Value Added Tax (VAT)
- Central Sales Tax (CST)
- Entry Tax
- Purchase Tax
- Luxury Tax
- Taxes on lottery, betting and gambling,
- State cesses and surcharges
- Entertainment tax (other than the tax levied by the local bodies).
SINGLE TAX AND BUSINESS UNIFORMITY
One Point Single Tax will be implemented under GST which will help the business community to decide their supply chain, pricing modalities and in long run will help to stabilize pricing market.