GST Bill: A Revolution in Indian Taxation System
Are you suffering from the burden of taxation? Do you pay a huge sum of money to the government as taxes? If yes, then the GST Bill is bringing great relief to you.
At present, the Indian citizens are encumbered with the tax regime of the country. The total rate of tax paid by a single citizen is approximately 25-30% which includes different rates related to the Income Tax, Excise Duty, Customs Duty, VAT, Service Tax, etc., as per the nature of businesses or transactions. Due to this, many individuals have indulged in the illegal business related activities.
For an average earner, it is very difficult to sustain in such an overburdened tax mechanism. At present, the price of goods and services is increased due to the additional rate of taxes applicable to them. Also, many a time it happens that the customer suffers double taxation causing a great increase in the value of the goods and services.
To overcome the same and bringing consolation for the Indian citizens, Finance Minister Arun Jaitley, has introduced a new system of indirect taxation for the Indian economy, i.e., ‘The Goods and Services Tax(GST).’ The Bill for the same was presented in the Lok Sabha on 19th December 2014 which was passed on 6th May 2015. The GST Bill is pending in the Rajya Sabha at present and is expected to be passed in the coming budget session.
What is GST Bill all about?
The Goods and Services Tax(GST), which is a bill pending in the Indian parliament, is designed to reform the present indirect tax structure of India. GST means a tax that will subsume all the indirect taxes which are levied on the goods and services produced in the Indian territory. Different state and central taxes shall amalgamate under one head of GST, and then all the goods and services shall be taxed at the point of sale only.
Accordingly, the goods or services shall not be taxed on each stage of sale or purchase, but a single rate of tax shall be levied at the time of its consumption. It will definitely vanquish the negative impact of the current indirect taxation system.
Various advantages shall be provided by the proposed GST Bill if passed in the upcoming budget. It has been designed to build a common market for the whole economy as every single transaction shall be administered by a sole authority. Following are the benefits Indian citizens will fetch if the GST Bill will be passed in the parliament:
- There shall be no difference between goods and services for taxation. Thus, it will help to reduce the complications related to the present taxation system as well as the lessen down the administrative and compliance costs.
- The tax shall be levied at the final destination by following the input tax credit(ITC) mechanism.
- The whole tax administration shall be in the hands of a single authority that will assure transparency and lessen down the corruption.
- The taxes shall be levied at the point of sale to the ultimate consumer and not at every sale or purchase, which shall lower down the prices of the goods and services causing an ultimate effect on the economic growth.
- There shall be a seamless movement of goods and services across the country and hence, the transaction costs of the business shall be reduced.
- An individual shall not be required to go for multiple registrations under the tax regime, as a single GST registration shall be enough.
- By following the input tax credit system, the cascading effect shall be reduced, i.e., there shall be no double taxation for a single transaction.
- It shall create a single market for the whole economy making it more stronger and powerful under a single domain at the national level.
Accordingly, the GST Bill if passed shall bring a rarity to the citizens of the country. It will help to make the new year more happier for all. You will have more money to save which you would be able to invest in different schemes for generating wealth.
So if you are expecting good savings after the passage of the GST Bill, you can take guidance from My SIP Online on how to invest such amount into mutual funds.
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