GST Bill: How goods and services tax regime will impact your life

The goods and services tax will make articles of mass consumption cheaper while freebies at workplaces may attract new taxes.

The final countdown for goods and services tax regime has begun. The Centre is likely to meet July 1 deadline. But, even if it fails, the Modi government has time till September 15 to roll out GST.

Once the Parliament session is over, the GST Council has another task to perform – to categorise about 5,000 goods and services in the four GST slabs before what Finance Minister Arun Jaitley called a ‘revolutionary’ reform is rolled.

The GST Bill lays down a destination taxation regime where end users or consumers will be taxed. The GST Council made it a four-tier tax structure with lowest tax slab fixed at 5 per cent followed by 12, 18 and 28 per cent brackets.

Justifying the four slabs, Finance Minister Arun Jaitley yesterday said that ‘a BMW car’ cannot be taxed the same way as ‘hawai chappal’.

THE OTHER SIDE OF GST

There is a theoretical possibility of GST rate going up to 40 per cent if the flexibility given to the Centre and states are factored in. Essentially, GST Bill does not provide for what the government has been promoting as ‘One Nation, One Tax’ regime.

The state and Centre will still be levying separate taxes on goods moving from one city to other and one state to other.

The all kinds of Cess – Swachh Bharat et al – will still be imposed on luxury and what is called demerit goods like cigarettes etc. The cess will be provisionally collected for five years after rolling out of GST. The proceeds will be used to compensate states incurring losses due to GST regime.

However, the GST will bring down the number of taxes currently being imposed in the country. Today more than 25 kinds of taxes including income tax are imposed in the country. The GST Bill is likely to reduce the number of taxes to around half-a-dozen.

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Source By http://indiatoday.intoday.in

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