Goods and Service Tax-Bill.

“The Constitution (122nd) Amendment Bill comes up in RS, on the back of a broad political consensus and boosted by the ‘good wishes’ of the Congress, which holds the crucial cards on its passage. Here’s how GST differs from the current regimes, how it will work, and what will happen if Parliament clears the Bill[1].”

The above statement is headlines in ‘The Indian Express’ which also states that the fact ‘GST, the biggest reform in India’s indirect tax structure since the economy began to be opened up 25 years ago, at last looks set to become reality.’

As the GST bill has been passed now there are many questions like ‘What is GST bill all about’,

‘How will GST bill help us in our taxes’ or ‘How will taxation has changed for goods’ etc. the article will let you know all about GST bill?

GST stands for Goods and Service tax. It is one of the remarkable changes in India’s indirect tax changes since the beginning of the economy. This tax is levied when a consumer buys any goods or services.

Basically GST bill has three components.

1) Central GST 2) State GST 3) Integrated GST
·         levied by centre ·         levied by state · Levied by centre on interstate supply of goods and services.

Now the question is

How GST Bill is different from other taxes?

As we all know there are many indirect taxes like service tax, sales tax, luxury tax etc. We came across many such indirect taxes in our day to day life activities like having meal in restaurant, gone out to watch a movie. The bills they offer you contain these taxes.

What GST bill has done is, it subsumes all other indirect taxes in one i.e. it combines all of these taxes into one. It is done all for central and state level taxes.

The biggest advantage of GST bill is it avoids cascading of taxes. GST only taxes the final costumer. As a result cascading of taxes is avoided and production costs are cut down.

Here is the list of taxes subsumed by GST.

Central level taxes State level taxes
·         Central Excise Duty,

·          Additional Excise Duty,

·         Service Tax,

·         Countervailing Duty and

·         special  Additional Duty of Customs

·         State Value Added Tax or Sales Tax,

·         Entertainment Tax,

·         Octroi and Entry Tax,

·         Purchase tax,

·         Luxury Tax,

·         Taxes on Lottery, Betting and Gambling

This means that GST bill includes almost every indirect tax. But there are still some taxes that are not included in GST bill:

Exclusion of GST bill:

  • Petroleum Products
  • Alcoholic Beverages
  • Diesel
  • Tobacco

Advantages of GST bill:

Introduction to GST bill will bring following advantages:

  • Multiple Taxes are removed.
  • Both goods and services are taxed at same rate.
  • Taxes on manufacturers are reduced.
  • It helps in smooth flow of credit in the country

In single line we can say that GST will simplify administration, improve compliance, and remove distortions in production, trade and consumption[2].

If something has noticeable benefits, it doesn’t mean that it is perfect. There are some disadvantages too, which can’t be ignored

Disadvantage of GST bill:

  • The taxes will rise from 14% to 20% on the implication of GST bill.
  •  The Tax on retails will almost get doubled
  • The tax on imported Goods will be around 6%
  • There will be control on every system by the Central and State Governments


Some other benefits and highlights about GST bill:

  • Export will become more competitive.
  • It will simplify tax structure, broaden the tax base and create a common market across state.
  • This will increase India’s tax to gross domestic product ratio.
  • Uniformity in taxes across territories.
  • Improvement in the international cost competitiveness of native goods and services.
  • Tax compliance throughout the country.



Authored by Deepali Gangil | Edited by Aishwarya Himanshu Singh.

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