"17 Years of GST"
- 2000 : Ex PM Sh. Atal Bihari Vajpayee constitutes a committee to draft GST Law, during NDA 1.
- 2004 : GST Task Force concludes that GST must be implemented to improve the Tax Base and Tax Governance Structure in India.
- 2006 : Finance Minister, Govt of India, Sh. P. Chidambaram (UPA 1) officially proposed the introduction of GST from 1st April, 2010 onwards.
- 2011 : Constitutional Amendment Bill is introduced to enable GST Law.
- 2012 : Parliamentary Standing Committee begins discussions on GST Law.
- 2013 : Parliamentary Standing Committee tables its report in Parliament on GST Law.
- 2014 : GST Bill is introduced in the parliament by Finance Minister, Sh. Arun Jaitley.
- 2015 : GST Bill is passed in the Lok Sabha but is not passed in the Rajya Sabha.
- 2016 : Amended and Updated GST Law is passed in Lok Sabha and Rajya Sabha.
- 2017 : Four Supplementary GST Bills are passed in the Lok Sabha and Rajya Sabha.
- 2017 : 1st July 2017 : GST becomes the new Tax Structure for Indirect Taxation in India.
Until 30th June, 2017 the Indirect Tax Structure of India included multiple taxes and cess, which were levied on various Products and Services across various state of India, thereby making the Tax Structure very complicated. The lack of clarity about which tax and how much tax for every state made doing business in India a complicated and cumbersome process. It was also a big hindrance for Foreign Companies and Foreign Institutional Investors, who wanted to invest in various manufacturing and service industries in India, but were reluctantly using the old taxation system (Pre-GST), which included the following indirect taxes :
As can be seen from the maze of above mentioned indirect taxes in India, it was difficult to comply with existing (Pre-GST) taxation structure, time consuming and cumbersome for corporate and traders to conduct business in India. The Pre-GST taxation era also led to corruption and fast growth of informal economy (parallel cash based economy, where business transactions were not recorded and reported to the government). In order to remove the above mentioned barriers, capture all business transactions, encourage Foreign Investment and in order to increase the share of formal market in the economic ecosystem of India, the GST Bill was introduced in India from 1st July, 2017 onwards
- Central Excise Duty.
- Central Sales Tax.
- Additional Duties of Excise.
- Excise Duties levied under Medicinal and Toiletries Preparation Act.
- Service Tax.
- Surcharges and Cesses.
- State VAT / Sales Tax.
- Purchase Tax.
- Entertainment Tax (other than those levied by local bodies)
- Taxes on Lottery, Betting and Gambling
- Surcharges and Cesses.
GST Tax Regime aims at creating a creating a Single Unified Market for Goods and Services. It also aims at simplifying the Indirect Tax Regime in India. Further, GST aims at making Indian Market an equal opportunity market for all individuals and companies. GST is targeted at increasing the Tax Base of India and the revenues collected by this initiative shall go a long way in enhancing the welfare projects of the government. GST will also help in further consolidation of Cooperative Federalism. GST will go a long way in simplifying the tax maze for foreign companies to invest in India.
Benefits for Citizens
- No Hidden Taxes.
- Reduction in Overall Tax Burden.
- Higher Disposable Income in the Long Term.
- Increased Economic Activity on National Level.
- Enhanced Job Opportunities on National Level.
- Maximum benefits for Poor and Common People.
- Maximum number of products in the 5% Tax Bracket.
- Development of Harmonised National Market for Products and Services.
- Customers will have more choices for Products and Services, because of "Increased Competition".
Benefits for Trade & Industry
- Non-Intrusive Electronic Tax Compliance System.
- Seamless flow of Tax Credit from manufacturers to retailers.
- Reduction in Multiplicity of Taxes, Cascading and Double Taxation.
- Freedom and Transparency in movement of Goods and Service in India.
- Common procedures for registration, duty payment, return filing and refund claims.
Benefits for Indian Economy
- Generation of more Employment.
- Common System of classification of Goods and Services.
- India will become a Manufacturing and Service Export Hub.
- Level playing field for producers and consumers across India.
- Unified National Common Market for all Goods and Services.
- Broader Tax Base and substantial decrease in "Black Transactions".
- Boost Foreign Direct Investment (FDI) by simplifying the Tax maze.