Impact Of Gst In India

1123 Words5 Pages

The idea of GST was initiated under the leadership of Atal Bihari Vajpayee in the year 2000.The government of India has introduced constitutional amendment bill for GST in lok sabha. Report of GST was prepared in the meeting of empowered committee on 20th of November 2007, after certain modifications the final version was prepared and sent to the govt of India on 30th Of April 2008. It was decided to be introduced from 1st of April 2010 but due to the fear of loss of revenue to states, and they wrote to finance committee that they were not ready to introduce GST and this is the reason behind the delay. Bill was introduced in the lok sabha by Arun Jaitley the present finance
…show more content…
GST will Unifi and integrate these tax reforms to a common base. This tax regime aims to convert the country into a integrated market by eliminating various taxes and replacing them with one tax.
GST has dual structure that is central component levied and collected as the central goods and service tax(CGST ) and service taxes on goods and services that move from one state to another is state goods and service tax (SGST). Once the GST is introduced in states the states complain about the loss of revenue, so there are provisions made to compensate for it. The compensation may extend upto 5 years. The third main component of GST is dual GST and that is the expected model of GST in India.
GST is levied at the rate of 10% it is ultimately paid by the end users of goods and services. Certain types of supplies are GST free like fresh foods and medical supplies. Certain real estate sales are subjected to GST that is sale of commercial property. Producers of product or service pay tax on the materials required for production and they paid tax is set off when the consumer pays tax on the purchased
…show more content…
It is beneficial to the consumers and the parties in the supply chain. But when we see its impact on state revenue many states fear that they will lose revenue as entry tax or octroi is absorbed but the bill assures that if any losses incurred by states will be compensated for the first five years but some states want to be compensated for ten years. States have been assured 100% compensation for their losses, first three years, and 75% in the fourth year and 50% in the fifth year. The finance ministry expects that not all states will need compensation for five years, particularly consuming states may see their revenue increase with the implementation of GST. The council initially proposed to have 27% as GST rate in India but Arun Jaitley mentioned that it would be very high and proposed
Open Document