CHANDIGARH, MAY 4
The Haryana Excise and Taxation Minister, Capt Abhimanyu, has hailed the Goods and Services Tax as a path-breaking reform in taxation history which will knit the entire country into a single market by ironing out distortions, put an end to skewed and dissimilar tax practices, and make the going for trade and industry a lot easier.
Capt Abhimanyu said the new tax would subsume 17 different types of indirect taxes of Centre and states and do away with multiplicity of taxes.
Amalgamation of various indirect taxes into single tax will not only lead to simplification of the indirect taxation regime in the country but also pare down considerably the compliance cost to the taxpayers.
The GST would take the feature of Value Added Tax (VAT) from state boundaries to national level. GST is a destination-based tax. The threshold limit under GST has been fixed at Rs 20 lakh which is currently Rs.5 lakh in Haryana.
"It is my privilege to be a part of the process for bringing about this historical and far-reaching reform in the indirect taxation system of the country. The structure of GST has evolved through extensive discussions and deliberations, first under the aegis of the Empowered Committee of Finance Ministers, and, thereafter, through combined efforts of the Centre and state governments in the GST Council", Capt Abhimanyu said.
The Centre and states joined hands to hammer out a structure of GST resolving all contentious issues through consensus in the true spirit of cooperative federalism in the country. “It is a matter of great honour and pride for me to have been deeply associated with the progress of GST in various forums”, he added.
The Constitution of India had categorically divided the domains of Centre and the states for the purpose of levy of tax. It is for the first time that the Constitution of India by The Constitution (One Hundred and First Amendment) Act, 2016 has empowered both, the Parliament as well as state legislatures, to tax simultaneously the incidence of supply of goods and services.
The amalgamation of various indirect taxes into a single tax will lead to simplification of the indirect taxation regime in the country. Resultantly, the compliance cost to the taxpayers will come down significantly.
Capt Abhimanyu said another important feature of the GST was that tax practices had been harmonized to the best possible extent. The success of GST hinges on its harmonized operations. The Constitution (One Hundred and First Amendment) Act, 2016 provided for Constitution of Goods and Services Tax Council with the Union Finance Minister as its Chairman and having a minister from each state government as members.
For the success of GST, it is essential that Input Tax Credit (ITC) is first verified and, thereafter, passed on to the buyers or the recipients swiftly and efficiently. It is estimated that there will be 300 crore invoice-wise details per month to be captured by the GST system for verification.
“This is a voluminous task which cannot be performed manually without the help of state-of-art technology which will be at the backbone of the new taxation system. The success of the GST will largely depend on robust IT infrastructure”, he said.
The threshold limit under GST has been fixed at Rs 20 lakh which is currently Rs.5 lakh under the Haryana Value Added Tax. The taxpayers shall also be extended the comfort of facilitation centres to avail themselves of the facilities of computer and connectivity.
Small and medium-scale taxpayers have been given the option of composition. The taxpayers having an aggregate turnover of less than Rs.50 lakh, are eligible to opt for composition scheme. The taxpayers opting the composition scheme under GST shall have to file one quarterly return.
The Excise and Taxation Minister said, traders under composition scheme would be required to pay tax at the rate of half per cent under the State GST and half per cent under the CGST. The manufactures will have to pay at the rate of one per cent and taxpayers serving foods (restaurateurs) will be paying at the rate of 2.5% under the composition scheme of GST.
The composition scheme is not available to the tax payers engaged in the business of inter-state supplies or providing supplies of services except (restaurateurs). No input tax credit shall be admissible to a composition taxpayer.
The GST shall be levied on a common base of taxpayers both by Centre and states. The rate structure on each supply of goods and services shall remain uniform across states and the list of exempted supplies of goods and services shall also be same.
A taxpayer will have to deal with only one taxing authority. The principle of single interface for the taxpayers constitutes the cornerstone of GST implementation. Therefore, the state authorities and central authorities have been cross-empowered to perform various statutory functions under the Central and states laws to provide single interface to the taxpayers, the minister added.
The GST Council has been mandated by the Constitution to make recommendations to the Union and states on all matters relating to GST to ensure harmonised structure of goods and services tax system. The Council has taken so far all decisions by building consensus.
It is the supply of goods or services or both that shall be taxed under GST at value addition occurring at each stage during the chain of supply of goods and services starting from manufacturing or importation to the final consumer. GST retains the feature of Value Added Tax of levying tax at the value addition at each stage by giving set off of the taxes suffered at the previous stages to the taxpayers.
Capt Abhimanyu said the GST would go a long way in doing away with the Inspector Raj as there will be a minimal interface between the taxpayers and the authorities. The structure of GST has been such that all GST related services to all taxpayers shall be available on a common GST portal though the tax shall be paid under three different Acts namely State GST, Centre GST and IGST.
The taxpayers shall have to file only one return. All the returns shall be filed online on the same common GST portal. The reconciliation and verification of each inward supply with the corresponding outward supply and input tax credit shall be made by the system automatically without any human intervention.
Export-related supplies and supplies to SEZ shall be zero rated. Therefore, tax suffered on these supplies at the previous stages shall be refundable. All taxpayers registered under the existing tax laws shall be migrated to GST on provisional basis.
Such taxpayers as are already registered under the existing tax laws shall be extended the benefits of input tax credit on the stock of goods as held on a day preceding commencement of GST, the minister added.
Salient Features of GST:
b. Duties of Excise (Medicinal and Toilet Preparations)
c. Additional Duties of Excise (Goods of Special Importance)
d. Additional Duties of Excise (Textiles and Textile Products)
e. Additional Duties of Customs (commonly known as CVD)
f. Special Additional Duty of Customs (SAD)
g. Service Tax
b. Central Sales Tax
c. Luxury Tax
d. Entry Tax in lieu of octroi
e. Entertainment Tax (not levied by the local bodies)
f. Taxes on advertisements
g. Purchase Tax
h. Taxes on lotteries, betting and gambling
i. State cesses and surcharges insofar as they relate to supply of goods and services
The Haryana Excise and Taxation Minister, Capt Abhimanyu, has hailed the Goods and Services Tax as a path-breaking reform in taxation history which will knit the entire country into a single market by ironing out distortions, put an end to skewed and dissimilar tax practices, and make the going for trade and industry a lot easier.
Capt Abhimanyu said the new tax would subsume 17 different types of indirect taxes of Centre and states and do away with multiplicity of taxes.
Amalgamation of various indirect taxes into single tax will not only lead to simplification of the indirect taxation regime in the country but also pare down considerably the compliance cost to the taxpayers.
The GST would take the feature of Value Added Tax (VAT) from state boundaries to national level. GST is a destination-based tax. The threshold limit under GST has been fixed at Rs 20 lakh which is currently Rs.5 lakh in Haryana.
"It is my privilege to be a part of the process for bringing about this historical and far-reaching reform in the indirect taxation system of the country. The structure of GST has evolved through extensive discussions and deliberations, first under the aegis of the Empowered Committee of Finance Ministers, and, thereafter, through combined efforts of the Centre and state governments in the GST Council", Capt Abhimanyu said.
The Centre and states joined hands to hammer out a structure of GST resolving all contentious issues through consensus in the true spirit of cooperative federalism in the country. “It is a matter of great honour and pride for me to have been deeply associated with the progress of GST in various forums”, he added.
The Constitution of India had categorically divided the domains of Centre and the states for the purpose of levy of tax. It is for the first time that the Constitution of India by The Constitution (One Hundred and First Amendment) Act, 2016 has empowered both, the Parliament as well as state legislatures, to tax simultaneously the incidence of supply of goods and services.
The amalgamation of various indirect taxes into a single tax will lead to simplification of the indirect taxation regime in the country. Resultantly, the compliance cost to the taxpayers will come down significantly.
Capt Abhimanyu said another important feature of the GST was that tax practices had been harmonized to the best possible extent. The success of GST hinges on its harmonized operations. The Constitution (One Hundred and First Amendment) Act, 2016 provided for Constitution of Goods and Services Tax Council with the Union Finance Minister as its Chairman and having a minister from each state government as members.
For the success of GST, it is essential that Input Tax Credit (ITC) is first verified and, thereafter, passed on to the buyers or the recipients swiftly and efficiently. It is estimated that there will be 300 crore invoice-wise details per month to be captured by the GST system for verification.
“This is a voluminous task which cannot be performed manually without the help of state-of-art technology which will be at the backbone of the new taxation system. The success of the GST will largely depend on robust IT infrastructure”, he said.
The threshold limit under GST has been fixed at Rs 20 lakh which is currently Rs.5 lakh under the Haryana Value Added Tax. The taxpayers shall also be extended the comfort of facilitation centres to avail themselves of the facilities of computer and connectivity.
Small and medium-scale taxpayers have been given the option of composition. The taxpayers having an aggregate turnover of less than Rs.50 lakh, are eligible to opt for composition scheme. The taxpayers opting the composition scheme under GST shall have to file one quarterly return.
The Excise and Taxation Minister said, traders under composition scheme would be required to pay tax at the rate of half per cent under the State GST and half per cent under the CGST. The manufactures will have to pay at the rate of one per cent and taxpayers serving foods (restaurateurs) will be paying at the rate of 2.5% under the composition scheme of GST.
The composition scheme is not available to the tax payers engaged in the business of inter-state supplies or providing supplies of services except (restaurateurs). No input tax credit shall be admissible to a composition taxpayer.
The GST shall be levied on a common base of taxpayers both by Centre and states. The rate structure on each supply of goods and services shall remain uniform across states and the list of exempted supplies of goods and services shall also be same.
A taxpayer will have to deal with only one taxing authority. The principle of single interface for the taxpayers constitutes the cornerstone of GST implementation. Therefore, the state authorities and central authorities have been cross-empowered to perform various statutory functions under the Central and states laws to provide single interface to the taxpayers, the minister added.
The GST Council has been mandated by the Constitution to make recommendations to the Union and states on all matters relating to GST to ensure harmonised structure of goods and services tax system. The Council has taken so far all decisions by building consensus.
It is the supply of goods or services or both that shall be taxed under GST at value addition occurring at each stage during the chain of supply of goods and services starting from manufacturing or importation to the final consumer. GST retains the feature of Value Added Tax of levying tax at the value addition at each stage by giving set off of the taxes suffered at the previous stages to the taxpayers.
Capt Abhimanyu said the GST would go a long way in doing away with the Inspector Raj as there will be a minimal interface between the taxpayers and the authorities. The structure of GST has been such that all GST related services to all taxpayers shall be available on a common GST portal though the tax shall be paid under three different Acts namely State GST, Centre GST and IGST.
The taxpayers shall have to file only one return. All the returns shall be filed online on the same common GST portal. The reconciliation and verification of each inward supply with the corresponding outward supply and input tax credit shall be made by the system automatically without any human intervention.
Export-related supplies and supplies to SEZ shall be zero rated. Therefore, tax suffered on these supplies at the previous stages shall be refundable. All taxpayers registered under the existing tax laws shall be migrated to GST on provisional basis.
Such taxpayers as are already registered under the existing tax laws shall be extended the benefits of input tax credit on the stock of goods as held on a day preceding commencement of GST, the minister added.
Salient Features of GST:
- The GST would be applicable on the supply of goods or services as against the present concept of tax on the manufacture and sale of goods or provision of services. It would be a destination-based consumption tax.
- It would be dual GST with the Centre and states simultaneously levying it on a common tax base. The GST to be levied by the Centre on intra-state supply of goods and / or services would be called Central GST (CGST) and that to be levied by the states would be called State GST (SGST).
- The GST would apply to all goods other than alcoholic liquor for human consumption.
- The GST would apply to all services barring a few to be specified.
- In case of five petroleum products, viz. petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel, it has been provided that these goods shall not be subject to the levy of GST up to date notified on the recommendation of the Goods and Services Tax Council.
- Tobacco and tobacco products would be subject to GST. In addition, the Centre could levy Central Excise duty on these products.
- The GST would replace the following taxes currently levied and collected by the Centre:
b. Duties of Excise (Medicinal and Toilet Preparations)
c. Additional Duties of Excise (Goods of Special Importance)
d. Additional Duties of Excise (Textiles and Textile Products)
e. Additional Duties of Customs (commonly known as CVD)
f. Special Additional Duty of Customs (SAD)
g. Service Tax
- State taxes that would be subsumed under the GST are:
b. Central Sales Tax
c. Luxury Tax
d. Entry Tax in lieu of octroi
e. Entertainment Tax (not levied by the local bodies)
f. Taxes on advertisements
g. Purchase Tax
h. Taxes on lotteries, betting and gambling
i. State cesses and surcharges insofar as they relate to supply of goods and services
- An Integrated GST (IGST) would be levied and collected by the Centre on inter-state supply of goods and services. Accounts would be settled periodically between the Centre and states to ensure that the SGST portion of IGST is transferred to the destination state where the goods or services are eventually consumed.
- Tax payers shall be allowed to take credit of taxes paid on inputs (input tax credit) and utilize the same for payment of output tax. However, no input tax credit on account of CGST shall be utilized towards payment of SGST and vice versa. The credit of IGST would be permitted to be utilized for payment of IGST, CGST and SGST in that order.
- Exports shall be treated as zero-rated supply. No tax is payable on export goods but credit of input tax related to the supply shall be admissible to exporters.
- Import of goods and services would be treated as inter-state supplies and would be subject to IGST in addition to the applicable customs duties.
- The laws, regulations and procedures for levy and collection of CGST and SGST would be harmonized to the extent possible.
- ---balbirsingh227@gmail.com
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