The Goods and Services Tax Bill Proposed has many important features and benefits. GST has first introduced in 2007 to 2008 budget session. The current Union Cabinet Ministry approved the GST Tax proposal on 17th December 2014, for introduction GST Constitutional Amendment Bill. Later on, the GST was presented in Lok Sabha on 19th December 2014. If the parliament passes the law, GST Tax may come into force from April 2016. But due to some issues, it did not come into existence. If things went well, the Bill might be tabled and taken up for discussion during the coming Budget session. The present Central Government is very particular to implement GST Constitutional Amendment Bill. Let us hope the best. Now here you can find what are salient features and benefits and reasons behind, for implementing GST Tax.
Salient Features of GST
These are the features of Goods and Services Tax
- GST is a single unified consumption tax and broad based tax on supply of goods and services.
- GST is a Destination Based Tax.
- There is no scope for multiple taxation on Goods & Services such as Sales Tax, Entry Tax, Octroi, Entertainment Tax, Luxury Tax, etc.
- It will increase tax collections due to the wide coverage of Goods & Services.
- Goods and Service tax will reduce the tax burden on the assessee’s since it will avoid the cascading effect.
- In GST tax, there is no scope to levy for resale tax, special tax, additional tax, turnover tax, etc.
- Zero rating of exports and inter-State sales of goods and supply of services.
- GST will reduce effective rates of tax to one or two-floor rates.
- The credit of CGST paid on inputs may be used only for paying CGST on the output.
- The credit of SGST paid on inputs may be used only for paying For Departmental Officers only SGST.
Benefits of Goods and Services Tax
These are the main benefits of GST Tax:
- The Structure of GST is simple and lean.
- The Indian Market will be a unified market and hence it will boost our economy.
- It can reduce the transaction cost of business and facilitates smooth movement of goods and services across the States.
- As GST tax is not applicable for Goods or Services which are exported out of India it is good for export-oriented business.
- As all taxes are subsumed in GST there is no change for cascading effect.
- Simplified Taxation Regime.
- Transparent and Corruption free tax administration.
- Unified Indirect Taxes for all the Retailer, Manufacturer.
- Taxation burden will be Equitably divided between manufacturing and Services Industries.
- Similar Return filing at State and Central Level will also reduce the complexity of taxation system.
- Uninterrupted ITC (Input Tax Credit) Chain on Inter-State transactions.
For more details about Goods and Services Tax click on the links below