Introduction
The Goods and Services Tax (GST) is soon going to be a reality in India and the government is taking effective steps to achieve its target implementation dated which is 1st July 2017 waiving the existing dual system of taxation of goods and services in the form of VAT, sales and service tax. It will subsume all existing indirect taxes in India. GST has been recognized as one of the most decisive tax reform in the history of tax reforms in India. The GST bill passed in Lok Sabha on 29th March 2017 ratifying the earlier one passed on 8th August 2016 and received nods of the upper house of parliament on 6th April 2017. We shall discuss the latest updates on GST in the coming paragraphs.
Recent Developments
- Four Supplementary bills viz. GST (compensation to States) Bill, 2017, Central GST (CGST) Bill, 2017, Integrated GST (IGST) Bill, 2017 and the union territory GST bill was approved by the GST council during its various meetings held in February and March 2017. These bills were later approved by the union cabinet chaired by the Prime minister of India on 22nd March 2017 before they are presented in the budget session of parliament.
- To involve taxpayers and provide regular updates about the developments, the ministry of finance launched a mobile app for tax payers and stakeholders on 24th February 2017.
- The Central Board of Excise and Customs (CBEC) will soon be renamed as Central Board of Indirect Taxes and Customs (CBIC) and the minister of finance has also approved reorganization of field formations. It shall be operational from 1st June 2017
- The union cabinet also given its nod to the amend the relevant existing legislation for smooth implementation of GST and to annul the Acts which will become irrelevant post implementation of GST.
- GST council has decided a four-tier tax rate viz. 5%, 12%, 18% and 28%, with lower tax rate for essential items and the highest for luxury goods and demerit goods like tobacco and aerated drinks. Council also approved a maximum cess of 15% for highest rate.
- A GST working group have been set up via CBEC order dated 24th March 2017 to examine sector specific issues to identify and address the peculiar issue relevant to sectors.
- The prime minister of India has announced a major public outreach program to enlighten the stakeholders about the provisions and benefits of GST.
Bottom Line
Implementation of GST is in the final stages of completion and it is visible from proactive efforts of governmental authorities. The GST council is already discussing the draft rules for Registration, valuation, input tax credit and transition towards GST. It is now high time for the industry as well as professionals to tighten their belts to ensure they are well prepared before the GST go live on papers.
