NEW TAXATION REGIME : A GST MODEL

A GST envisages as TAX of future – Incorporating all Central and State Indirect Tax under unified umbrella of taxation system. 

A GST acronym pronounced more accurately as Goods and Services Tax, as a emerged as New taxation system introduce by the union government through The Constitution(122 Amendment) GST Bill 2014. The Bill envisages a unified comprehensive indirect tax system.  Some very prominent features about the Bill –

• It gives the Central and State governments the concurrent power to laid down laws on taxation of goods
• The Bill establishes GST Council headed by the President. The Council will make recommendation on taxes, cesses, and surcharges levied by the centre,state and local bodies; The Council will also recommend model GST laws, principle of levy other things
• Composition of the GST Council: The GST Council is to consist of the following three members: (i) the Union Finance Minister (as Chairman) (ii) the Union Minister of State in charge of Revenue or Finance and (iii) the Minister in charge of Finance or Taxation or any other, nominated by each state government.
• Parliamentary system will pass laws on the recommendations of GST Council and also compensate the states who suffer revenue losses arising from the GST upto five year tenure.
• Alcoholic liquor, crude petroleum, diesel, petrol, aviation turbine fuel, and natural gas are not under the purview of GST.
• Only the Centre may levy and collect GST on supplies in the course of inter-state trade or commerce. Therefore Tax must divided between the centre and state by law.
• An Additional tax on the supply of goods in the course of interstate trade or commerce would be levied and collected by the centre. Such additional tax shall be assigned to states, for two year on recommendation by GST Council.
• It will impose all over country with uniformity of rate and replaces multiple central and state taxes.

A GST is expected to Boost the Economic Framework of country. The survey projects economic growth for 2014-15 to be at 7.4%, while for 2015-16 to be in between 8.1% and 8.5%. Therefore the survey emphasizes on the potential of GST and Direct Benefit Transfer system.

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