The Goods & Services Bill (GST Bill) was passed in the Rajya Sabha earlier in Au

gust 2016. The GST Bill, which is considered as one of the biggest tax reforms i
n the country since Independence, proposes to eliminate all indirect taxes on go
ods and services and levy a single rate.
Taxes are a difficult subject for the working class, especially for those who ar
e unaware of its jumbled calculus. It looks like a maze of legalese and math, si
gnifying nothing much. With the GST, the government is aiming to simplify it for
the public. The government explains the GST in simple terms in the recently-pub
lished frequently asked questions.
Here is what it has to say: GST is one indirect tax for the whole nation, which
will make India 1 unified common market. GST is a single tax on the supply of go
ods and services, right from the manufacturer to the consumer. Simply, the amoun
t that we expend for goods and services has the taxes embedded in them. Mostly,
the consumers are not even aware of or ignore the tax they pay for things they b
uy. Amendment of the bill is going to give a relief from the high percentage of
taxes.
In a recent meeting, the GST council has agreed on rate structure as 0 per cent
, 5 per cent, 12 per cent, 18 per cent and 28 per cent. Having a slab rate struc
ture in GST is a departure from popular international practice of having one rat
e of tax for all goods and services. The council has not announced the schedule
of goods and services under each slab rate. The FM has mentioned that highest ta
x slab rate applicable to items currently taxed at 30 per cent to 31 per cent (e
xcise duty plus VAT) will be taxed at a lower rate of 28 per cent. Some of the g
oods taxed at 28 per cent will be charged with an additional cess for five years
. This will make the life of Indians much simpler as the GST bill eliminates 17
indirect taxes. Manufacturing will get more competitive as GST addresses cascadi
ng of tax, inter-state tax, high logistics costs, creating a boost in the retail
industry.
Minister of Finance Arun Jaitely explained why the decision was taken to compens
ate states with a cess. "As per our calculation, Rs 50,000 crore will be needed
in the first year for compensation. If we have to raise this by way of tax, we w
ill need Rs 1,72,000 crore," he said. "Luxury cars, tobacco, aerated drinks will
be levied with a cess, which along with clean energy cess on usage of coal, wil
l be used to compensate states for loss of revenue," he added. The Finance Minis
ter also said that the compensation to states will have a sunset clause of five
years, even as the council will take a call every year to see if the same needed
to be continued.
Benefits of the GST Bill
The final consumer will bear only the GST charged by the last dealer in the supp
ly chain, with set-off benefits at all the previous stages.
Minister of Finance Arun Jaitley had earlier said that GST will be beneficial to
the Centre, states, industrialists, manufacturers, the common man and the count
ry at large since it will bring more transparency, better compliance, increase i
n GDP growth and revenue collections.
Logistics firms believe that GST will help them and result in lowering the produ
ct prices by up to 10 per cent. This will affect the MRP very effectively, incre
asing sales and revenue.
GST will also generate growth for sectors like auto, consumer durables and fast-
moving consumer goods (FMCG) while in effect of these sectors to pass on impact
of lower taxes on goods to consumers.
- See more at: http://retail.franchiseindia.com/article/whats-hot/trends/GST-Bil
l-and-Its-benefits.a5504/#sthash.qVNJ4Adq.dpuf