Brief History and Implementation of GST in India

Brief History and Implementation of GST in India:

• ·      Idea of National GST was mooted by Kelkar Task Force in 2004(The Kelkar Task Force advised to unify indirect taxes in the form of GST,  In 2010, Finance Minister P. Chidambaram had announced in his speech that GST will be implemented from April, 2011. In 2011, the 115th Constitution Amendment Bill was introduced for the levy of GST on all goods and services in the Lok Sabha.)

• ·      In 2014 NDA Government tabled the constitution(122^nd amendment) Bill,2014 on GST in the Parliament on 19^th Dec.2014

• ·       Lok Sabha Passed the Bill on 6^th may, 2015 and Rajya Sabha 0n 3^rd August 2016

• ·   Subsequent to ratification of the Bill by more than 50% of the states. Constitution (122^nd amendment) Bill 2014 received the Assent of the president on 8^th September, 2016 and became constitution (101^st amendment) Act, 2016, which paved the way for Introduction of GST in India.

• ·      In the Following Year, on 27^th march 2017, the central GST Legislation- CGST Bill 2017, IGST Bill,2017 and UGST Bill 2017and GST (Compensation to states ) Bill,2017 were introduced in Lok Sabha. Lok Sabha passed these Bills  on 29^th March 2017,2017 and with the receipt of president assent on 12^th April 2017, the bills were enacted.

• ·       GST has subsumed multiple Indirect Taxes like excise duty, service Tax , VAT, CST, Luxury Tax, Entertainment Tax, Entry Tax, etc.

• ·         On 1^st July 2017, GST was Launched.

 Concept of GST:

Ø  France was First Country to Implement GST in the year 1954, within 62 years of its advent, about 160 countries across the world have adopted GST because this tax has capacity to raise revenue in the most transparent and neutral manner.

Ø  GST is a Value added Tax levied on manufacture, sale and consumption of Goods and Services.

Ø  GST offers comprehensive and continuous chain of Tax credits from producer point/ service providers point upto the retailers level/consumers level thereby taxing only the value added at each stage of Supply Chain.

Ø  The Supplier at each stage is permitted to avail Credit of GST paid on the purchase of Goods and/or Services and can set off this credit against the GST payable on the supply of Goods and services to  be made by him. Thus only the final consumer bears the GST Charged by the last supplier in the supply chain, with set off benefits at all the previous stages.

Ø  Since only the value added at each stage is taxed under GST there is ni Tax on Tax i.e there is no Cascading Effect. Moreover GST doesn’t differentiate between Goods and Services thus the two are taxed at a Single rate.

Reference: ICAI