It is said that the GST is a catalyst for removing all imbalances in market and economy. The Senior Director of Indirect Tax stated that the principles of fiscal equivalence had been broadly followed in arriving at the GST rates for various products. Some products are there which will come with higher rates after the application of GST rule. However, the other type will offer lower rate chart to the buyers.
What is GST?
Stands for Goods and Service Tax, GST bill in India are developed to replace the indirect taxes carry out on products and services. It is a kind of Value Added Tax which differs from country to country. Aims in achieving overall economic growth, this bill is applied at a national level. Introduced with the principle of tax equivalence, Good and Services Tax will lead inflationary pressure. At the same time, it will also push some sectors for facing cost challenges.
Mr. V.P. Singh (Mr. Rajiv Gandhi’s FM) had introduced Modvat in 1986-87 FY. It was certainly the first step towards the GST bill. As finance minister, Mr. Manmohan Singh had proposed service tax in 1991-92 FY. It was carried by Mr. P. Chidambaram as he proposed for the GST bill in 2006-07 FY. As FM, Mr. Pranab Mukherjee had introduced Constitution Amendment Bill in 2013-14 FY. Finally, the Constitution Amendment Bill for GST had been cleared by the Parliament.
What PM said?
It is tough to imagine an India without the integration done by Sardar Vallabhai Patel a few decades back. Although it looks sturdy to be implemented across the nation, GST will bring the major or minor markets together. It is simple to be followed. The PM also said that the indirect tax reform is a result of combined efforts of various political parties at different points of time.
What FM said?
India was economically fragmented. As per the finance minister, the travel through this system will open endless possibilities for the people of India. GST in India will apply a single tax across the country which will make a single market for 1.32 billion people. Through this bill, the government has ensured that there was no extra burden on the weaker sections living in different parts of India.
GST on agriculture
Tractors parts and fertilizers are set to come with reduced rate slabs. Well, the GST rate for fertilizers has reduced from 12% to 5%. If you are associated with the selling of tractor parts, you will save 10% on its duty. It has launched with 18% instead of 28%. An unregistered person will get 30 days to complete registration formalities from the date of liability.
Services without tax
Your holiday trip may get cheaper as hotels and lodges with tariff below one thousand are in this category. Small restaurants will come under the 5% category. For the purchase of rough precious and semi-precious stones, you will have to pay 0.25 per cent as service tax. You should also know that the services like railways and air travel fall under 5% category.
Goods without tax
The food items that have been relieved from any tax slab include buttermilk, fresh fruits and vegetables, chicken, eggs, natural honey, all kinds of salt, fresh meat, fish, milk, curd, flour, besan, bread, jaggery and hulled cereal grains. Among the other items, jute & handloom, bones & horn cores, kajal, palmyra, hoof meal, horn meal, bone grist, bone meal, sindoor, human hair, bangles, legal papers, printed books, and newspapers are the first ones. However, there are other goods, too. In addition to the free slab, Gold has been taxed under a separate slab of 3 per cent which is, of course, good news for ornament lovers.