On the strike of the mid night clock at 12:00 am on 1st July 2017, the Independent India saw the introduction of a new and advanced taxation system for its citizen by the name of GST or in other words Goods and services taxes. The GST bill was introduced as The Constitution (one hundred and first amendment) act 2017 followed by the way of the constitution 122nd amendment bill. The journey of the GST bill has been a long one as it was first introduced in the year 2000 under the governance of the then Prime Minister, Mr. Atal Bihari Vajpayee but was not able to see the days light since July 2017.
What is GST Bill?
Remarked by the government of India as one of the boldest tax reforms of India after 70 years of Independence for India, the GST was launched on the 1st July with the presence of the both the houses of the Parliament under the guidance of our President, Mr. Pranab Mukherjee and our respected Prime Minister, Mr. Narendra Modi. Even though with opposition from the Congress, Trinamool Congress, DMK parties and the Communist Parties of India, GST was passed and the days to come will clarify the success or the failure of the GST bill.
Goods and Services tax is the uniformed proposal for the application of taxes on the various goods and services consumed by the Indian citizens. This system is applied so as to avoid the application of different taxes in different states and hence creates chaos and burns a hole in the pocket of the common man. The GST is a single application of taxes on the commodities utilized by the citizens of India ranging from common grocery items to the luxury brands of cars.
GST tax rate includes various slabs under which its citizens need to shell out from their pockets so as boost the gross domestic production of the country. The slab includes the following rates: 0%, 5%, 12%, 18%, 28%.
The slab for rates varies from 0% to 28% depending on the utility of the items. Before the introduction of the GST the various taxes applied by the state and the central government consisted of the following:
- Value Added Tax (VAT)
- Central Excise Duty
- Luxury Tax
- Service Tax
- Entertainment Tax
- Purchase Tax
- Entry tax
And the list goes on…….
With the introduction of the GST there will be uniformed and clear taxation imposed on the consumer. Taxes will be levied under the Central GST and the State GST and the revenues will be given to the respective governments, hence reducing the dependence of the state government on the Central government.
GST rates for the various commodities includes the following:
Items that are cheaper under the GST are as following:
- Food items includes items such as maida, besan, salt, unbranded atta, food at small restaurants under Rs. 500, fresh vegetables and fruits.
- Personal Care items such as soap, hair oil, toothpaste.
- Travel for economy class travel and bikes or scooters with engine capacity below 350cc.
- Household items such as pressure cookers and pans.
Items that will be costlier under the GST will be as follows:
- Fine dining and five star hotels will be expensive.
- Personal care items like shampoos and deodarants.
- Household items like tvs, refrigerators, acs and washing machine.
- Services like courier, mobile phone tariffs, insurance premiums, banking services and broadband services.
The true test of time for GST will be the general population who will decide the final fate for the GST bill.