India Inc hails goods and services tax

Finally, GST is going to become a reality for India after 11 years – during 2006-07 annual budget speech, former Finance Minister Chidambaram first coined about “GST in India” in parliament.

Prime Minister Narendra Modi on Friday dubbed the overall of India’s tax system through a unified goods and services tax (GST ) as a “good and simple tax” which will end the harassment of traders and small businesses while integrating India into one market with one tax rate.

Opposition parties like the Congress, the Left, the TMC, the DMK and the RJD boycotted the event.

A GST Council has spent months thrashing out the final legislation, which was blocked in parliament for a year until an amended version was approved.

Addressing the gathering here, Prime Minister termed the GST as a “good and simple tax regime” that will eliminate the compounding effects of multi-layered tax system. This path we have chosen is not one party or one government’s. I hope GST will deliver significant benefits by improved taxation efficiency and ease of doing business, and will convert India into one common market.

The centre is planning to integrate GST with the permanent account number (PAN) issued by the income tax department for all persons and entities coming under indirect tax in a bid to tighten tax compliance. While exports are zero-rated, export of services between an Indian company and its related establishments outside India – including an establishment in the UAE – would be subject to IGST at the prescribed rate (0.25 per cent, three per cent, five per cent, 12 per cent, 18 per cent, 28 per cent and cess in certain cases). That is the real meaning of the cooperative federalism.

The GST Council finalized 18 per cent tax on services rendered by telecom operators against 15 per cent at present. Now we have put 3% GST on gold.now the same community which was opposing 1% tax is welcoming 3% GST on Gold.

The integrated GST will also apply to imports.

The government promises the new regime will simplify trade by replacing more than a dozen levies with one tax, combat corruption, and enrich state coffers by bringing the informal economy into the digital era.

More than 70 per cent of small businesses in India have yet to adopt digital technology and the GST poses a major challenge for them to computerise themselves, said Praveen Khandelwal of the Confederation of All India Traders. Taxes can be paid and returns all filed online.

“Any consumption post midnight would be charged under GST”, Tokhi said. So there also consumer stands to lose if it is not brought under the GST.

As per mobile phone industry body, Indian Cellular Association (ICA), there are 36 jurisdiction in the country which includes 29 states and seven union territories. Rough diamonds will be taxed at 0.25 percent rate and gold at 3 percent.