Every news channel is talking about the recent GST (Goods and Services Tax) which is wreaking a havoc in Parliament. Finance Ministry introduced this bill in December 2014, since then it is as same as it was (Not formulated across the country). Why is this happening so? Now, lets have a quick look on this.
GST BILL :-
A tax system is called ideal tax system when it generates essential revenues for one country. As you all know, in India, we have two tax system; one is direct and another is indirect. GST (Officially, the constitution (122nd amendment) bill, 2014) is compilation of all types (Central and state) of indirect taxes charged on sales and consumption of goods and services and manufacture across the country. It is a uniform tax rate system so If I say in simple terms, GST will replace all indirect taxes on central and state level. If this bill formulates across the country there won't be a barrier between interstates and central.
FORMULATION OF 1%:-
As you all know, in our taxation system every state has its own tax charges and differ from other states but if GST comes into action, every state will have one uniform taxation system. However 1% tax charge system will also exist. Don't get my point? Wait! I elaborate. Suppose Kerala wants to import some goods from Tamil Nadu, for this Kerala has to pay 1% tax to Tamil Nadu moreover it is not about once. If Kerala wants to import goods on monthly basis or daily basis it needs to pay every time, which is not correct. Instead of that Alcohol and Real state will be exempted from GST bill. Every body knows how much revenue these items can generate so it ll be a flaw.
EFFECT ON CONSUMERS:-
If this GST has good impact on Indian GDP growth but it has bad impact on consumers. As far as I'm concerned it will be levied on basic necessities of needy citizens. What about luxury items? Contradiction will be remained intact if this happens. Government should levy GST on luxury items rather than basic necessities. If finance ministry do so, consumers will be feel free from excessive tax burden.
The solidity and flaw of GST tax regime will go hand in hand in parliament. It will be exhilarating to see how this tax will be take charge after so many hassles.
Thanks for sharing it but why they are not updating gst.. I believe they should do every financial year.
ReplyDeleteSee as I mentioned in post there are certain flaws. Although gst bill will be uniform across the country but no state minister is ready to pay 1% extra on interstate basis and it is repeated also.
ReplyDelete1% tax...Is it the special feature of GST or it was existed before n it is modified now?
ReplyDelete1% is additional tax by states over and above GST rate which is introduced now.
ReplyDelete