One big decision after another. Let’s just say this: The Modi government for sure has had a busy term. While demonetisation was aimed at curbing corruption—the accumulation of black money specifically, GST has been implemented for a completely reason. The move got so much publicity, which one must say, was and still is necessary for its smooth implementation. And now it has created a situation wherein every Indian know what GST stands for and in general, what it is.
This article transcends the ‘general information’ that people have on the subject: GST. You might be well-versed with this topic but there’s always something that you can learn. Here are some facts on GST in India:
Although implemented this year, in 2017, the idea to implement GST in was brought in during the tenure of our Prime Minister Atal Bihari Vajpayee in the year 2000.
Few commodities like alcohol and petrol are exempted from the GST tax structure.
We aren’t the first country in the world to adopt the system of GST. In fact, there are more than 160 countries in the world today, that follow this tax structure. In 1954, France became the first country in the world to adopt GST.
In India, we follow a dual-GST regime which basically means that there are two different types of GST. Central GST and State GST. Apart from Canada, we are the only country in the world to use the dual-GST system of taxation.
An excess of 1% GST is going to be levied by the central government on inter-state transactions for a period of two years. The money collected will go to the state where the supply is coming from. This is being done to offset any losses that the state governments might face due to the implementation of GST.
Implementing the GST tax regime in India was not an easy process. To do so, the constitution of India had to be amended, which it was. By doing so, levying any kind of indirect tax which is included in the GST is considered to be an illegal activity.
The Indian government has divided the GST rate into four slabs. 5%: that’s charged on the essentials; 12% and 18%: that are considered to be the standard rates; 28%: that’s charged on luxury goods and services.
A GST council has been set up the government. The job of this council is to overlook the implementation of GST in India. The council has decision making powers and will help to settle any kind of dispute arising due to the implementation of GST.
GST is a consumption based tax. As in, unlike in the earlier tax regime under GST, it will not be the manufacturing state which will collect the tax for the product/service. Instead, the state wherein the consumption of the product will take place will collect the tax for that product. This was one of the major reasons as to why a number of states such as Tamil Nadu, which is strong-manufacturing state was opposing the implementation of GST.
If any state is suffering losses from the implementation of GST, their losses will be covered up until a period of five years.