But why the bill is so important; why Prime Minister Narendra Modi and Finance Minister Arun Jaitley, including economic experts are calling the passage of the bill a historical event?

Here, we simplify the GST Bill to understand its significance and impact on Indian economy:

1. The Goods and Services Tax Bill is an umbrella tax structure covering all states. 

2. The Central GST and State GST are to be paid to the accounts of the Centre and the States separately.

3. The GST shall have two components: One levied by the Centre (hereinafter referred to as Central GST), and the other by the States (hereinafter referred to as State GST).

4. "Goods and Services Tax" would be a comprehensive indirect tax on manufacture, sale, and consumption of goods and services throughout India.

5. GST will replace several indirect taxes levied by the Central and State governments.

6. Goods and services tax would be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method.

7. GST-registered businesses can claim tax credit to the value of GST they paid on purchase of goods or services as part of their normal commercial activity.

8. Taxable goods and services are not distinguished from one another and are taxed at a single rate in a supply chain till the goods or services reach the consumer.

9. This dual GST model would be implemented through multiple statutes (one for CGST and SGST statute for every State.

10. To the extent feasible, uniform procedure for collection of both Central GST and State GST would be prescribed in the respective legislation for Central GST and State GST.

11. The Central GST and the State GST would be applicable to all transactions of goods and services made for a consideration except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits.

12. There will be a GST council to resolve concerns between stats and the Centre.  

13. Cross utilisation of ITC between the Central GST and the State GST would not be allowed except in the case of inter-State supply of goods and services under the IGST model which is explained later.

14. A uniform State GST threshold across States is desirable and, therefore, it is considered that a threshold of gross annual turnover of Rs10 lakh both for goods and services for all the States and Union Territories may be adopted with adequate compensation for the States.

15. The States are also of the view that Composition/Compounding Scheme for the purpose of GST should have an upper ceiling on gross annual turnover and a floor tax rate with respect to gross annual turnover.

Latest News from India News Desk