Goods and Services Tax (India)

Goods and Services Tax (GST) is an indirect tax which was introduced in India on 1 July 2017
and was applicable throughout India which replaced multiple cascading taxes levied by
the central and state governments. It was introduced as The Constitution (One Hundred and First
Amendment) Act 2017,[1] following the passage of Constitution 122nd Amendment Act Bill. The
GST is governed by a GST Council and its Chairman is the Finance Minister of India. Under
GST, goods and services are taxed at the following rates, 0%, 5%, 12% ,18% and 28%. There is
a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold.[2] In
addition a cess of 22% or other rates on top of 28% GST applies on few items like aerated
drinks, luxury cars and tobacco products.[3] GST replaced a slew of indirect taxes with a unified
tax and is therefore set to dramatically reshape the country's 2 trillion dollar economy

History[edit]

The reform process of India's indirect tax regime was started in 1986 by Vishwanath Pratap
Singh, Finance Minister in Rajiv Gandhis government, with the introduction of the Modified
Value Added Tax (MODVAT). Subsequently, Manmohan Singh, then Finance Minister under
of P V Narasimha Rao, initiated early discussions on a Value Added Tax at the state level.[5] A
single common "Goods and Services Tax (GST)" was proposed and given a go-ahead in 1999
during a meeting between then Prime Minister Atal Bihari Vajpayeeand his economic advisory
panel, which included three former RBI governors IG Patel, Bimal Jalan and C Rangarajan.
Vajpayee set up a committee headed by the then finance minister of West Bengal, Asim
Dasgupta to design a GST model.[6]
The Ravi Dasgupta committee was also tasked with putting in place the backend technology and
logistics (later came to be known as the GST Network, or GSTN, in 2017) for rolling out a
uniform taxation regime in the country. In 2002, the Vajpayee government formed a task force
under Vijay Kelkar to recommend tax reforms. In 2005, the Kelkar committee recommended
rolling out GST as suggested by the 12th Finance Commission.[6]
After the fall of the BJP-led NDA government in 2004, and the election of a Congress-
led UPA government, the new Finance Minister P Chidambaram in February 2006 continued
work on the same and proposed a GST rollout by 1 April 2010. However in 2010, with
the Trinamool Congress routing CPI(M) out of power in West Bengal, Asim Dasgupta resigned
as the head of the GST committee. Dasgupta admitted in an interview that 80% of the task had
been done.[6]
In 2014, the NDA government was re-elected into power, this time under the leadership
of Narendra Modi. With the consequential dissolution of the 15th Lok Sabha, the GST Bill
approved by the standing committee for reintroduction lapsed. Seven months after the
formation of the Modi government, the new Finance Minister Arun Jaitley introduced the GST
Bill in the Lok Sabha, where the BJP had a majority. In February 2015, Jaitley set another
deadline of 1 April 2017 to implement GST. In May 2016, the Lok Sabha passed the
Constitution Amendment Bill, paving way for GST. However, the Opposition, led by the
Congress, demanded that the GST Bill be again sent back to the Select Committee of the Rajya
Sabha due to disagreements on several statements in the Bill relating to taxation. Finally in
August 2016, the Amendment Bill was passed. Over the next 15 to 20 days, 18 states ratified the
GST Bill and the President Pranab Mukherjee gave his assent to it.[7][8]
A 22-members select committee was formed to look into the proposed GST laws.[9] State and
Union Territory GST laws were passed by all the states and Union Territories of India except
Jammu & Kashmir, paving the way for smooth rollout of the tax from 1 July 2017.[10] There was
to be no GST on the sale and purchase of securities. That continues to be governed by Securities
Transaction Tax (STT).[11]
Launch[edit]

The Goods and Services Tax was launched at midnight on 1 July 2017 by the President of
India, Pranab Mukherjee, and Prime Minister of India, Narendra Modi. The launch was marked
by a historic midnight (30 June 1 July) session of both the houses of parliament convened at
the Central Hall of the Parliament. Though the session was attended by high-profile guests from
the business and the entertainment industry including Ratan Tata, it was boycotted by the
opposition due to the predicted problems that it was bound to lead to for the middle and lower
class Indians. [12][13] It is one of the few midnight sessions that have been held by the parliament -
the others being the declaration of India's independence on 15 August 1947, and
the silver and golden jubilees of that occasion.[13]
Members of the Congress boycotted the GST launch altogether. They were joined by members
of the Trinamool Congress, Communist Parties of India and the DMK. The parties reported that
they found virtually no difference between the GST and the existing taxation system, claiming
that the government was trying to merely rebrand the current taxation system. They also argued
that the GST would increase existing rates on common daily goods while reducing rates on
luxury items, and affect many Indians adversely, especially the middle, lower middle and poorer
classes.[14]
After a bill passed by Finance Minister Arun Jaitley on 3-8-2016, there was a long debate till 9
pm. The AIADMK, which opposed the GST from the outset, has been left out of the polls. All
other parties supported the bill. Thus the Rajya Sabha "unanimous acceptance" was passed to the
Constitution Amendment Bill. All 203 members in the House voted for the Bill (the Lok Sabha
has to be re-approved due to corrections)

"Goods and Services Tax" is a comprehensive indirect tax deducted by the Central and State
Governments. It is a comprehensive indirect tax deductions all over India on production,
sales and use, goods and services; It is imposed at every step for the sale or purchase of
goods or services from Central and State Governments on 'Input Tax Credit Basis' across
India, rather than goods and services taxes.

The Central Government has decided to implement GST from April, 2017. But before that,
at least 15 states (50 per cent) of the 29 states have to ratify the Bill. In addition, the states
need to set up a new system. Supplementary bills of issues such as income distribution
should be passed by parliament. So it is difficult to come into effect from April one. (New
taxation comes into effect after July 2017 [15].)
Immediate effect[edit]

Currently the service tax rate is 14.5%. The GST rate will be 18 per cent and service sector
will be burdened. Travel, air travel, ambulance service, cultural activity, some pilgrimages
and sporting events will be expensive. Service sector accounts for 57 per cent of India's
economy. So if the tax rate increases, the economy will be affected. (In the country with a
population of 130 crores, the government will have an additional income of Rs 1.15 lakh per
annum, with an additional income of Rs 1.15 lakh per annum, if the poverty is Rs 36,000 per
annum, the poverty line will be taxed at Rs 40,000 per annum from Rs 2 lakh. If the families
of the people are taken into consideration, they will have to pay fourfold taxes It is possible
to know the real effect when it comes to implementation.)

Taxes imposed by local governments are not inherent in GST. These taxes remain separate.

All indirect taxes, including excise duty, value added taxes, service tax, luxury taxes and
actuities, will be canceled with GST implementation.
If the government allocates GST rates to 18%, manufacturers and consumers will benefit
from this new tax system. Customers are now paying an estimated 25% of the cost on an
item because of the excise duty, watt and central sales tax. The implementation of the GST
will reduce the consumer load.
Manufacturers who are paying excise, VAT and service tax will no longer be covered under
a uniform tax system.

Customers pay some other cessions along with the tax on the existing system. But there is no
longer any benefit on taxation.
The tax rate of certain essential commodities, including raw food, is currently around 6% to
8%. If GST rates are set to 18 per cent, the price of all essential commodities will be
increased.

Timeline[edit]

Union Finance Minister Pallanappan Chidambaram, during the Union Budget 2006-07, made
a declaration for implementation of GST on April 1, 2010, on 28 February 2006. , An
Empowered Committee consisting of the State Finance Minister with the Central
Government. As the introduction was introduced, the task was to prepare GST in India for
this decade.

Following this announcement, the Finance Minister, the Finance Minister and the Co-
operative Secretaries, and the concerned joint secretaries decided to set up a joint working
group on May 10, 2007. The Commission submitted its report to the Empowered Committee
on November 19, 2007, after extensive internal interaction with the Deputy Secretary of
State and its Members Joint Executive Team (Working Group), experts and representatives
of Commerce and Industry Chambers of the Central Finance Ministry.
 The report was discussed in the Empowered Committee on November 28 detailing, in 2007,
some modifications were made, based on observations written by the states and states, at that
point, views were sent to a final version prepared by the Empowered Committee and the
Government of India (April 30, 2008). The suggestions were received by the Government of
India on December 12, 2008, and by the Empowered Committee (in Dec. 6, 2008).
"GST Council not to Disturb or Alter Primacy of Legislature in the area of Taxation FM - Shri
Mukherjee calls Upon the State Finance Ministers to make all efforts to meet the timelines of
GST by April 2011 - FM's Address at meeting with Empowered Committee of state Finance
Ministers ".

Year before taxes passed to GST[edit]

All indirect taxes, including excise duty, value added taxes, service tax, luxury taxes and
actuities, will be canceled with GST implementation.

Tax Year of Introduction

Sales Tax 1957

Service Tax 1994

Central watt 2000

Excise duty 1985

Access Tax 2000

Value-added tax 2005

A brief history[edit]

Year Incident

Forming a committee headed by West Bengal Minister of Finance Asim Dasgupta to

2000
form a GST draft by Prime Minister Atal Bihari Vajpayee Government.

Recommendation by the Khecker Workforce on indirect taxes to bring comprehensive

2003
GST implementation on the basis of Watt

In the 2006-07 Budget speech, the Lok Sabha was asked by Finance Minister P
2006 Chidambaram about the GST nationally by April 1, 2010; The Finance Ministry's
Empowered Committee has been drafted and drafted by the GST Bill.

November: Empowered Committee releases first debate on GST. The target of

2009 implementation from April 1, 2010: The Empowered Committee of the Committee has
submitted a report to the Central Government on how GST should be.

The 115th amendment to the constitution of the GST on all goods and services is
presented in the Lok Sabha. Bill to Stand Standing Committee; 2011: GST will be
2011
implemented by Minister Pranab Mukherjee who presented the Union Finance Budget
from April 1, 2011.

Opposition of many states, including the BJP-ruled Gujarat. Thus the Bill was canceled in
2013
the Lok Sabha.
2014 The revised Bill by the BJP-led NDA came to power at the Center on December 9, 2014.

1. 6 May: Lok Sabha acceptance of bill to bring 122th Amendment to the

2015 Constitution; Submission to the Select Committee of the Rajya Sabha again,
2. Report on July 22, 2015: Government to consult with Congress and other
opposition parties
2016 1. GST Bill presented in the Rajya Sabha at the monsoon session of Parliament.
2. 'August 3, 2016: Bill passed in Rajya Sabha finally.'

2017 GST is in front of President Pranab Mukherjee at a special Janti session called at the
historic Central Hall of the Parliament House on midnight June 30, 2017. A single form
tax system is enforceable throughout the country.

Bill of August 2016 in the Rajya Sabha[edit]

On August 3, 2016, Union Finance Minister Arun Jaitley has approved the Goods and
Services Tax Bill (Bill) or the GST Bill (Bill) in the Rajya Sabha.
Bill on passage of Constitution Amendment Bill in the Rajya Sabha on 3 August 2016 is
expected. Already it is in the Lok Sabha. Now focusing on taxation rates on nationwide
goods and services tax (GST). Under the new system, the states and the center will collect
the same tax rates on goods and services. For example, 18% of GST across the country.
Good rate; Accordingly, states and central per capita 9% central GST. And State GST ,
(Central CGST and State SGST)

Details for GST[edit]

GST. Tax-Goods and Services Tax;

A comprehensive tax exemption on production, sales, consumption goods and services at

national level is known as commodity and service tax. It is said to be one of India's largest
service taxes. Simply put, consumers are taxed at every step when buying goods or obtaining
services. This tax system is already in force in 150 countries. It will bring the entire country
under the same market, bringing all indirect taxes into a single tax system.

GST Required[edit]

Currently there are various types of taxation in our country. The state governments
differently handle the taxation, luxury taxes, or lottery taxes, if the central government is not
taxed by the central and excise duty, service tax and customs taxes, value tax deductions.
GST is implemented to bring all these taxes into one single tax system.
 This can be traded without any difficulty across the country. Transaction costs also decrease.
This tax system is currently being used in India's economic status today, which can reduce
corruption and make it more transparent.
convenience[edit]

Currently the tax system in India is very complex. Legal obligations must be fulfilled to
conduct any business. GST simplifies tax methods and reduces operating costs. This will
ultimately benefit consumers. Besides, India's GDP (gross domestic product) and revenue
will increase and consumers will have an indirect advantage over this tax. India's income is
more favorable. Gross India's GDP and total revenue collection will increase. Export to
exports will attract foreign investors. Increases the ability to promote employment.

GST effect on transaction[edit]

Simply put the commodity and service tax, if a production unit is opened. The central
government should pay taxes and file a separate return. But other retail customers do not
have to pay taxes while returning your products and do not need to file a return. Since GST
is a uniform tax system for the whole country, the company does not have to pay taxes in
other states. So it's simple. So this new tax can bring our lives from complex to simplicity.
Freight & Service Tax (GST): Short Information: 27 May 2015]

State problem[edit]

Income from all tobacco products, excise, tobacco and petroleum products is important.
Many states have requested that these be kept out of the GST range. GST jumps will result in
a huge revenue loss. It was the demand of many states that the central government should
bear this.
The Central Government has proposed a tax deduction of 1% on Interstate Trading along
with the central GST and State GST. It was opposed by some states and most importantly
Congress. The Congress's main demand was to include GST rates in the constitution
amendment bill. The questions raised by the bill were demanded to establish a court order to
resolve the dispute.
1% of international tax deductions:
GST was a huge loss to the states of Tamil Nadu and Gujarat, who believed that production
was taxed above production. In the wake of their demands, the government was committed
to collecting one per cent additional tax on international trade. However, the Congress has
opposed it. Thus the proposal was dropped by the government.
So far the states could budget taxes if they were budgeted each year. But after GST logistics
it will be blocked. No longer taxable.
State problem solver[edit]

'Excise' , 'petroleum product' 'are currently out of the GST range as the states demand. These
tax liabilities will remain with the states.

The constitutional amendment bill is included in the next 5 years for the loss of state to GST.
The Center has dropped its proposal to tax 1 per cent for inter-state transactions.

The Government has been convinced that the GST rate can not be included in the
Constitution Amendment Bill, except for the Congress except for the rest of the opposition.
The GST board has been entrusted with the task of enforcing the arrangement of settlement
disputes that may arise from the bill.

Amendment to bill approval[edit]

Bill passed today is difficult because the NDA government has no majority in the Rajya
Sabha. But many of the Opposition parties have now suggested that it be included in the
revised bill and put it in the Rajya Sabha.

The bill is passed in the Lok Sabha after the Bill is passed in the Rajya Sabha. Because it is a
constitutional amendment bill, it must be ratified by two-thirds majority in both Houses. "All
states must accept their legislature and the legislature. The Bill will be implemented only
after all states have agreed. The Bill was enacted and the Central Government was aiming to
implement GST from April 1, 2017.

Effect of GST Tax

Advantages[edit]

Customers have a benefit: For instance, the current tax exemption limit of Rs.100 per
cylinder is Rs. There is. After the GST exchanges, it will drop to Rs 44.
Government benefits: Most of the materials are tax-deductible. This will increase the tax
network and tax collection will increase.
Companies where their taxes are currently being set up are being set up by their units. But
that policy goes away. Where the industry has an affordable environment where the unit is
installed.

Taxes in India now[edit]

Central tax State tax

1.Central Abacarissunka 1.Wat / service tax

2.Additional Excise Duty 2.Manage Tax (Local Agency Taxes)

3.Sewa tax 3.Purchase Tax

4.Additional Seema Toll 4. Luxury tax

(4) (Counter Welling Duty) 5.Later, Betting,

5. Special Extra Limit Tariff 6.Juju's Tax

6.churcharz 7.Access Tax

7.Sessions 8.Residential Ses,

schargazes

10.Actroy

GST law requires a constitutional amendment[edit]

Our constitution has empowered the central and state governments to authorize taxation in
India in the federal system. But there is some limit. The Central Government has the power
of taxation on various types of services and at certain levels of production. State
governments have the right to charge tax only on sale of goods. That is, the Center does not
have the right to tax the matter at the point of sale, and states have no right to pay service
taxes. But after the GST is passed, both central and state governments will be entitled to
collect taxes on goods and services. Thus, the Constitution has to be amended. GST has got
support from all states leaving Tamil Nadu.

The two-thirds majority of parliament's approval is required to pass this tax. Similarly,
Approval of 50 states states.

GST rate[edit]

The Empowered Committee of Ministers recommended a 2-step tax. It recommended 12%

of daily and basic materials and 18% for expensive goods. Also, some states have also
recommended special concessions to certain items. Finally, GST is likely to charge at 16% -
18%. [16]
Estimated tax consequences[edit]

Manufacturers who are paying excise, VAT and service tax will no longer be covered under
a uniform tax system.
Customers pay some other cessions along with the tax on the existing system. But there is no
longer any benefit on taxation.
The tax rate of certain essential commodities, including raw food, is currently around 6% to
8%. If GST rates are set to 18 per cent, the price of all essential commodities will be
increased. There is a possibility of rising prices of existing low taxes. For example, smaller
cars now have 8% excise duty. Smaller cars will be expensive if JST is implemented.
SUVs, luxury cars and heavy vehicles are now being charged 27 per cent and 30 per cent excise
duty. The price of these vehicles will be reduced if GST is charged from 18 per cent to 20 per
cent.

But if the principal financial advisor Arvind Subramanian's formula is adopted, luxury cars
will be expensive after the GST. Because Arvind Subramanian has recommended 40 per cent
tax on luxury cars.
Expensive X Cheap (estimate) from this taxation[edit]

GST from July 1, 2017[edit]

Pre-order preparations for implementation of the Freight & Service Tax (GST) system in all
states have come to fruition. The deadline for July 1, 2017, to be implemented by the new
system is to be set up
Taxes of goods and services[edit]

Commodity and Service Tax (GST) is a tax deduction all over the country on the use of
goods, services and services. Instead of paying taxes on goods and services in the new
system, the consumer tax must be paid only at the last level.
 There are currently many differences in tax collection mode from one state to another. This
difference will no longer be distant.

Technology implementation[edit]

Check Tribes The GST Connection Network (GSTN) has been developed to adjust taxes. This
technology will serve as the backbone of the new tax system. With this help the tax fraud track
can be easily detected. Taxpayer registration process has already begun. However, other states
except Southern states have not made much progress in this regard. Therefore, it is likely to be
postponed by September instead of July 1.
type[edit]

Central GST State GST

Central Excise Duty Valued Sales Tax

Additional excise duty Purchase transaction tax

Service tax Entertainment tax

Additional Seema Toll Luxury tax; Lottery tax

Includes SurCharge, Cess, Surcharge and cess

Features of GST[edit]

GST does not apply to traders up to Rs. 20 lakh per year.

The Government of India will have to pay the state governments for up to 5 years.
Tax rates for goods and services are fixed at four levels (5, 12, 18 and 28).
The maximum rate of Cess is charged at 15 per cent on excluding luxury goods, cold drinks
and tobacco and pan spice products (except Beedi).
GST maximum rate is 40%
The GST board has yet to decide which of these four-level tax rates should include any
goods and services. If this pending work is completed, tax-related suspicions will go away.
Cancellation taxes[edit]

Central Excise Duty, Seema Toll, Service Tax and Additional Deposits (Ses / Surcharge)
States' Value Added Tax, Admission Tax, Entertainment Taxes, Advertising Taxes, Lotteries
Taxes and State Deposits
The taxes imposed by the Central Government are Central GST (CGST) and the State
Governments' SGSTT. [17]

Total effect of GST[edit]

Cinema viewing, AC restaurants, meals, mobile use, and beauty salon will be more
expensive for consumers. All of these services will be covered under a maximum service tax
rate of 28%. Thus, when consumers are implementing GST since July 1, they have to pay
more taxes compared to current rates. The Freight and Service Tax (GST) board has
finalized applicable tax rates for various services. Education and healthcare will be exempt
from service tax.

AC non-restaurant restaurants 12% on alcohol and alcohol-free hotels will pay 18% service
tax. Telecommunication, insurance, hotel and restaurants have been brought to a different tax
level. "Most services are taxable at 18 per cent. The Central Board of Directors has decided
to apply for the service tax rates (5, 12, 18, and 28) for applicable goods.

Extraction of the tax[edit]

Services that are currently exempt from service tax will also benefit from the new system.
Transportation service is brought at least 5% of the tax rate level. This will keep consumer
consumption of goods, vegetables and fruits under control. Exclusion of non-AC railway
travel. AC Railways and Economy Grade Flight Travel has been reduced to 5 per cent from
6 per cent currently. The entertainment tax is levied on service tax. This will cost 28 per cent
on film tickets. Currently, 40% to 55% of taxes are on tax cuts. The new tax system will
have a lower tax rate compared to that. However, since state governments have the power to
charge local fees, the ticket prices are less likely to be cheaper. Horse race betting will also
cover the same price. [18]

Maximum tax[edit]

The Central and State Governments have decided to impose a maximum 28% tax on health and
harmful goods in the Goods and Service Tax (GST) system. All types of car, bus, truck, motor
cycles (including mopeds), personal utility jet aircraft and luxury boats 28% GST tax rate and
3% Ses, a combined 31% tax Igadipadisalagide. [19]
Tax rates[edit]

The government has finalized 3-6-2017 on Saturday, the highest commodity and service tax
(GST) price. The GST board has decided to impose a GST rate of 3% on gold. At the 15th
 meeting of the GST board held in New Delhi, GST rates have been finalized, including gold,
refined food, ready-made, footwear and beedi. The new class (3%) is set for gold, leaving
behind four categories (5%, 12%, 18% and 28%) scheduled for the past.

5 per cent for processed food, 18 per cent on Biscuit, 28 per cent for GD rates. The GST rate
of less than Rs.500 will be 5%. The GST rate is 18 per cent above the 500 higher footwear.
12% on ready-made garments, 5% GST rate on cotton clothing and solar panels. The GST
tax system will be effective from July 1.

The largest unified market in the world[edit]

The ambitious Goods and Service Tax (GST) system, which radically change the overall
image of the country's economy, is the largest tax reform reform since independence. The
new system will convert the whole country into one of the world's largest unified markets.
Currently, the multi-tax tax system will end, the prices of goods and services will be the
same across the country.

Tax burden[edit]

Currently, the total burden of various tax rates is 25% to 30%. Food grains, pulses, maidas,
chickpeas, milk, salt, vegetables and fruits used by each family will be cheaper. As GST
exemptions, these prices will be cheaper by 4 to 5 per cent than current prices. In the new
system, commodities will be available for competitive prices in the domestic and international
markets. This will instigate economic activities to accelerate. Total internal product (GDP) is
expected to increase by 1% to 2%.

The hotel industry has been taxed 12% to 18%. GST rates have become expensive for
automobile manufacture, hotel and insurance industries. Motor vehicles, especially electric
and fuel-driven hybrid vehicles, tourism and hotels taxes, are likely to infuse trade. Gold: 3%
on silver and diamond taxes Currently, 1 per cent excise duty on gold and 1 per cent valuable
tax (VAT) in many states. Gold is likely to rise to around 3 per cent GST. Insurance, health
and car insurance premiums will be expensive. At present, the tax rate of 15 per cent will rise
to 18 per cent.
Products outside the GST range[edit]

Petrol, diesel, natural gas, aircraft fuel, liquor and electricity - the existing watt and central excise
duty on these goods will continue.
Features of GST[edit]

GST does not apply to traders up to 20 lakh per year.

The Government of India will have to pay the state governments for up to 5 years.
Tax rates for goods and services are fixed at four levels (5, 12, 18 and 28).
The maximum rate of Cess is charged at 15 per cent on excluding luxury goods, cold drinks
and tobacco and pan spice products (except Beedi).
GST maximum rate is fixed at 40%.
Liquid goods / service[edit]

Freight and service providers from July 1, 2017:

Freight Current tax Tax Rate Percentage GST

Sugar, tea, edible oil 5

In-coffee, fragrance, beauty stuff + shampoo 28

Gold 2 3

Insurance 15 18

Bank service 15 18

Mobile bill 15 18

Drugs (Excise Limit Exemption) 5

Branded Gutka,. 72

The bike is more than 350 cc 31

Car 28
Size Sense

Hybrid Car 29 43

Business Class Flight Travel 9 12

Amusement Park IPal Match 28

Ayurvedic Products 8 -9 12

AC train travel 4.5 5

Platform Maintenance Every month, 5000 admin 15.5 18

Cheap goods and service[edit]

At present Suvs voted 48 to 55

Shipments and Services that will be issued on July 1, 2017:

Freight Current tax Tax Rate Percentage GST

Food Grain 22 to 24 -

Smart phone 5 to 15 12

Hair oil; Soap; Tooth pace 22 to 24 18

Ola Uber 6 5

Economic Flight Travel 6 5

Coal - (for power generation) 11.69 5

Cement 31 28

Tax deduction[edit]

Food items such as pickles, mustard sauce, insulin used for treating diabetes, electronic
material printer, reduced the cost of 66 items, including less than Rs 100 film tickets. The
decision was taken at a 16th meeting of the Consumer & Service Tax (GST) Committee

Taxation scheme[edit]

Taxes subsumed[edit]

The single GST(goods and service taxes) replaced several former taxes and levies which
included: central excise duty, services tax, additional customs duty, surcharges, state-level value
added tax and Octroi.[20][21] Other levies which were applicable on inter-state transportation of
goods have also been done away with in GST regime.[22][23] GST is levied on all transactions
such as sale, transfer, purchase, barter, lease, or import of goods and/or services. India adopted a
dual GST model, meaning that taxation is administered by both the Union and State
Governments. Transactions made within a single state are levied with Central GST (CGST) by
the Central Government and State GST (SGST) by the State governments. For inter-state
transactions and imported goods or services, an Integrated GST (IGST) is levied by the Central
Government. GST is a consumption-based tax, therefore, taxes are paid to the state where the
goods or services are consumed not the state in which they were produced. IGST complicates tax
collection for State Governments by disabling them from collecting the tax owed to them directly
from the Central Government. Under the previous system, a state would only have to deal with a
single government in order to collect tax revenue.[24]
HSN code in GST[edit]

HSN (Harmonized System of Nomenclature) is a 6-digit code for identifying the applicable rate
of GST on different products as per CGST rules. If a company has turnover up to RS. 1.5 Crore
in preceding financial year then they need not to mention HSN code while supplying goods on
invoices, if a company has turnover more than 1.5 Cr but up to 5 Cr then they need to mention 2
digit HSN code while supplying goods on invoices and if turnover cross 5 Cr then they shall
mention 4 digit HSN code on invoices.[25]
Rates[edit]

The GST is imposed at variable rates on variable items. The rate of GST is 2% for soaps and
28% on washing detergents. GST on movie tickets is based on slabs, with 18% GST for tickets
that cost less than Rs. 100 and 28% GST on tickets costing more than Rs.100 and 5% on
readymade clothes.[26] The rate on under-construction property booking is 12%.[27]Some
industries and products were exempted by the government and remain untaxed under GST, such
as dairy products, products of milling industries, fresh vegetables & fruits, meat products, and
other groceries and necessities.[28]
Checkposts across the country were abolished ensuring free and fast movement of goods.[29]
The Central Government had proposed to insulate the revenues of the States from the impact of
GST, with the expectation that in due course, GST will be levied on petroleum and petroleum
products. The central government had assured states of compensation for any revenue loss
incurred by them from the date of GST for a period of five years. However, no concrete laws
have yet been made to support such action.[30] GST council adopted concept paper discouraging
tinkering with rates.[31]

Goods and Services Tax Network (GSTN)[edit]

This section needs to be updated. Please update this article to reflect

recent events or newly available information. (June 2017)

As per the government website on GST, "Goods and Services Tax" Network (GSTN) is a
nonprofit organisation proposed to be formed for creating a website / platform for all the
concerned parties related to the GST, namely stakeholders, government and taxpayers to
collaborate on a single portal. When up and running, the portal is supposed to be accessible to
the central government which allows it to track down every transaction on its end while
taxpayers are advertised to have the ability of connecting this to their tax returns. However its
efficacy and efficiency is yet to be tested. The known authorised capital of GSTN is 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 with private banking firms for smooth running of the
transactions.[32]

Purpose of Economic Advancement

Originally the GST, the former Congress-led UPA government infant;

GST is likely to increase the total national output (GDP) by 1 to 2 per cent;
Increasing the total national product (GDP) is the means of carrying the system to
the path of progress;
Recovery of industry, industry and manufacturing sectors;
 Confidence and confidence in foreign investors. Foreign investment increases;
Facilitates more employment creation;
New co-ordination between Central and State Governments;
Tax deductions will increase as tax avoidance;
Assistance to the Government to implement monetary discipline, inflation control;

New tax specialist

GST exists in over 150 countries;

GST is located in all countries of the Economic Cooperation and Development
Organization (excluding US);
Now states are paying only sales taxes. State tax service is not available;
Central taxes on manufacturing. But there is no central tax on wholesale and retail
sales;
All states are now working independently on taxation, no longer;
GST will cost functional deduction;

New tax benefit

1. Enforcement of tax deductions.

2. GDP growth rate is expected to increase by 2%.
3. Goods and services available to consumers at a cheaper rate.
Business-friendly atmosphere for investors.
5. The burden of weight is equally shared on production and service.
6. Network for more extension,
* High tax collection ?? Transparent,
* Corruption free tax system. ??
7. Increased range of tasks.
8. So, for the Central and State Governments annually
Rs 1 lakh crore Expect additional income.