The biggest tax reform, GST to kick-off from midnight
The anxious wait of India Inc. will end today with the rollout of unified tax regime, Goods and Services Tax (GST). The government has planned a special event for the rollout of GST tonight, on Friday. After France, more than 140 countries have implemented GST with some countries like Brazil and Canada having Dual-GST model.
There is a lot of apprehension about GST and all eyes are set on the outcome of the implementation of the ‘one nation one tax’ as it remains the most debated topic in the media outlet. The primary reason why the government decided to implement GST is to avoid tax evasions.
GST in India is going to replace the existing numerous state and central indirect taxes in the country. Existing tax structure in the country includes central taxes like Central Excise duty, service tax, surcharges and cesses and state taxes like state VAT or sales tax, luxury tax, entertainment tax, etc.
GST, in many countries, was inflationary in its initial stage of implementation and same pressure hovers in India as well. As per a leading research agency, GST regime might result in ‘little inflation’ as the tax on certain items has been kept at a low of 28%.
There would be three kinds of GST viz. CGST, SGST and IGST. Under CGST, the revenues will be collected by the central government, under SGST, the revenues will be collected by the state government. If the transaction happens within the state, the tax revenues will be shared by state and central government, however, if the transaction is interstate, then the tax revenues will be collected by only the central government.
Essential consumer items such as cereals, pulses, dairy produce, fresh meat, fish, fresh vegetables and fruits are all exempt from GST. Also, alcohol, petroleum products like petrol, diesel and aviation turbine fuel and land are out of GST ambit for now. GST Council will take a decision on these products later.
With all said and done, GST is expected to be an efficient and simple tax system, which is likely to boost the health of the Indian economy.
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Via:: Stock – India Infoline