Goods and Services Tax is going to be imposed on all Indians from July 1, 2017, as single tax all over the country. GST is an indirect tax on manufacturers, sale, and consumption of goods and services throughout India to replace taxes levied by the central and state governments.
Vishwanath Prasad Singh introduced Modified Valued tax in 1968. The Constitution Act 2016, following the passage of Constitution 101st Amendment Bill. GST council governs GST. Arun Jaitley is the head of GST council.
Intro to GST
The introduction of GST is a significant step in the reform of indirect taxation in India. Combining several central and state taxes into single tax would mitigate cascading or double taxation. It facilitates a common national market. GST involves following taxes. It involves Central Excise duty, Service tax, Countervailing Duty, Special countervailing duty, Value Added Tax (VAT) and Central Sales Tax (CST). Others are Octroi, Entertainment tax, entry tax, purchase tax, luxury tax, advertisement tax, and taxes applicable on lotteries. The government is going to remove all the taxes. There will be only GST. As a result, It has no variations across the country.
The government has divided the tax categories into four. These are 5%, 12%, 18%, 28% and some items are nontaxable also.
Image Source: Non-Taxable Items
There will be no tax imposed on items like fresh meat, fish, chicken, eggs, milk, buttermilk, curd, natural honey, fruits, and vegetables. It also includes flour, bread, salt, bindi, sindoor, stamps, printed books, newspaper, Bangles, handlooms etc. There will be no tax on hotels and lodges with tariff below 1000 rupees.
Image Source: Taxable items
Items such as fish fillet, cream, skimmed milk powder, branded paneer and frozen vegetables. It also includes coffee, tea, spices, pizza, bread, kerosene, coal, medicines, lifeboats. Services like transport services, a small restaurant.
Frozen meat products, butter, dry fruits in packaged form, animal fat and sausage. Fruit juices, namkeen, Ayurvedic medicine, tooth powder, umbrella and cell phone. Services like Non-Ac hotels, business class air ticket, fertilizer.
This includes flavoured refined sugar, pasta, cornflakes, pastries, cakes, preserved vegetables, jam, and sauces. Soups, ice cream, mineral water, envelopes, notebooks, printed circuit, camera, speakers, and monitor. Services like AC hotels that serve liquor, telecom services, IT services, branded garments and financial services.
This category includes Chewing gum, molasses, chocolate containing cocoa, waffles, and wafer coated with chocolate. Paint, deodorant, shaving cream, shampoo, dye, sunscreen, and wallpaper. Heater, weighing machine, washing machine, vacuum cleaner, automobile, and motorcycle. It also includes Aircraft for personal use are the costliest services like 5-star hotels, race club betting, cinema.
Image Source: Arun Jaitley
GST is mainly boon for a common individual of India. As regular items are considered as nontaxable. While other items are in 5% and 12% category of which we are giving 14-18% tax without GST. But electronic appliances become costly because, for some industry, GST is a curse. We should encourage new step. GST is a new step for the middle and lower class Indians. Finally, GST is beneficial for the economic state of India.￼￼