21 March 2017 Current Affairs: The Union Cabinet chaired by the Prime Minister Narendra Modi has approved the four Goods and Services Tax (GST) related bills. These Bills were earlier approved by the GST Council after clause by clause, discussion over 12 meetings in past 6 months. The passage of these four GST related bills will pave the way for the biggest reform in the area of Indirect Taxes in the history of the country.
The Central Goods and Services Tax Bill, 2017 (CGST Bill): It makes provisions for levy and collection of tax on intra-state supply of goods or services for both by the Union Government.
The Integrated Goods and Services Tax Bill, 2017 (IGST Bill): It makes provisions for levy and collection of tax on inter-state supply of goods or services or both by the Union Government.
The Union Territory Goods and Services Tax Bill, 2017 (UTGST Bill): It makes provisions for levy on collection of tax on intra-UT supply of goods and services in the UTs without legislature. It is akin to States Goods and Services Tax (SGST) that will enacted by state legislatures for levy and collection of tax by the States/UTs on intra-state supply of goods or services or both.
The Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill): It provides for compensation to states for loss of revenue arising on account of implementation of the GST for a period of five years as per section 18 of the Constitution (One Hundred and First Amendment) Act, 2016.
The Union Government is trying for early introduction of GST, one of the biggest taxation reforms in the country as early as possible. GST Council headed by Union Finance Minister earlier had set 1 July 2017 as the date of commencement of GST. Union Finance Minister Arun Jaitley in his 2017-18 Budget Speech had mentioned that country-wide outreach efforts will be made to explain the provisions of GST to Trade and Industry.
GST : GST regime will amalgamate large number of Central and State indirect taxes into a single tax. It will mitigate cascading or double taxation in a major way and pave the way for a common national market. It will help in the realization of the objective of “One Nation, One Tax” and improve the Ease of Doing Business in the country.
It will also indirectly benefit people of the country by reducing the tax burden especially on the daily consumer items. The GST will bring in more transparency and efficiency by minimizing of human interface in the tax administration in the country.
It is also likely to lead to a reduction in tax evasion as a result of the computerization of the taxation process. It will in turn lead to increase in revenue collection for the Centre and the States.
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