GST 2016

Introduction of GST

Present Tax Structure in India for Indirect Taxes

Present Tax Structure in India for Indirect Taxes
Present Tax Structure in India for Indirect Taxes

Proposed Indirect Tax system after GST

Proposed Indirect Tax system after GST
Proposed Indirect Tax system after GST

Introduction of GST

The introduction of Goods and Services Tax (GST) would be a very significant step in the field of indirect tax reforms in India.

By consolidating a large number of Central and State taxes into a single tax, it would mitigate cascading or double taxation in a major way and pave the way for a common national market.

From the consumer point of view, the huge  advantage would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%.

GST would also make Indian products competitive in the domestic and international markets, as it will bring parity in taxation of domestic products with international products.

Due to Transparency in in nature it will be easier for administration to check evasion.

Genesis

The idea of moving towards the GST was first mooted by the then Union Finance Minister Shri P. Chidambaram in his Budget for 2006-07.

The Empowered Committee of State Finance Ministers (EC) which had formulated the design of State VAT was requested to come up with a roadmap and structure for the GST.

Joint Working Groups of officials having representatives of the States as well as the Centre were set up to examine various aspects of the GST and draw up reports specifically on exemptions and thresholds, taxation of services and taxation of inter-State supplies.

Based on discussions within and between it and the Central Government, the EC released its First Discussion Paper (FDP) on the GST in November, 2009.

This spells out the features of the proposed GST and has formed the basis for discussion between the Centre and the States so far.

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