GST to come into effect from July 1
The economic affairs minister Shaktikanta Das has confirmed that the decade-old Goods and Service Tax bill will finally come into force by July 1st. There will be no more delay as many feared and expected. It was estimated that the implementation of the bill might need longer time as many states didn’t comply with the demands and proposals of the new structure of tax collection.
Confirming the news, Das said, “GST implementation is a huge one and that is going to be implemented by July 1. Both central and state governments are working on this.”
Benefits of Goods and Tax bill:
- It is almost a decade since the proposal for GST bill was first made in the Parliament during the Congress regime. Under this new system, a set of indirect taxes along with at least 17 state and federal taxes will be subsumed and replaced by only one tax. It will cut the numerous, monotonous and lengthy process of the current system of taxation in the country.
- It will make the goods considerably cheaper in the market.
- The economic growth will be increased by 2%, says Arun Jaitley.
- Since the taxes will be levied on consumption of the goods, unlike on production, there is a lesser chance of evading taxes. This will boost the revenues of government which will then be used for improvising public sectors.
- A four-tier tax structure—5%, 12%, 18%, 28%—has been decided with lower rates for essential daily-use products and higher rates targeting the luxury cars, SUV and tobacco products.
- In view of the inflation, many essential goods including food products will be taxed at zero rates. The cess will be used by the central government to compensate the states for the losses these would endure.
- In the initial days after the implementation of GST, people must brace for a spike in prices, which, however, will not last longer than a year or less than that.