It would replace a plethora of taxes in India’s 29 states and create a single customs union.
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Chidambaram says GST rate must not exceed 18%. All businesses will be given a GST identification number, which will be a 15-digit code, consisting of their state code and ten digit PAN.
Expect many goods and purchases to become cheaper with the exception of fuel, liquor and tobacco. It would mark the biggest tax reform since the country’s independence. The tax which the state is losing now will reach the treasury. “They will be like income-tax consultants”, the person added. Stocks of PVR cinema have shot up in recent weeks.
Why is it a big deal?
Forbes also said once implemented, GST will subsume most of the country’s central and state level duties and taxes, thus making the country a national market and contribute significantly to the growth of the economy. The President will notify it after the Parliament passes it. Then it will go to all the state assemblies. “Our aim is to make the entire process completely paperless and we are devising multiple ways to ensure that even the smallest of retailers can file their taxes online”, Kumar told ET. A task force is working on GST portal so as to make it work for the endless point of time.
The Finance Minister will move four amendments to the Constitution (122nd Amendment) Bill, meant for the rollout of the GST Bill in the Rajya Sabha, when it is taken up for consideration and passage.
The logjam, which was witnessed in the Parliament in the recent sessions over the Goods and Services Tax (GST) Bill, will end on 3 August as the much-awaited Bill is all set to be approved by the Rajya Sabha today.
The government had to address several concerns and agree to key amendments demanded from the opposing political parties on the key proposed provisions of the GST bill.
Except for the capping of tax rate, the government has accepted the two key demands of the Congress in the draft Bill circulated among the members, which include doing away with one per cent additional tax, a definite provision in the statute for compensating states for revenue loss for five years, and the GST Council proposal to establish a mechanism for adjudication of disputes. This would have resulted in a cascading tax and defeated the intent of a “destination-based” tax that is GST. Much aligned to this objective, Model GST law released by the Ministry of Finance seeks to bring each person with an aggregate turnover of above Rs 10 lakhs within the umbrella of GST.
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So e-commerce companies which will see shrinking of profit margins & increase tax compliance net could slash discounts & freebies that they offer.
