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 Officially known as: The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014
 Introduced by: Arun Jaitely
 Published on: 19 December 2014
 Date Passed in Lok Sabha: 6th May 2015
 Date Passed in Rajya Sabha: Pending
Introduction
The Government of India seems committed to replace all the indirect taxes levied on
goods and services by the Centre and States and implement GST by 2016.
With GST, it is anticipated that the tax base will be comprehensive, as virtually all
goods and services will be taxable, with minimum exemptions.
Understand GST
 GST is a value added tax.
 Goods and Services Tax" would be a indirect tax on manufacture, sale and
consumption of goods and services throughout India, to replace taxes levied by
the Central and State governments.
 Exports would be zero-rated and imports would be levied the same taxes as
domestic goods and services adhere.
 The introduction of Goods and Services Tax (GST) would be a significant step in
the reform of indirect taxation in India.
 From the consumer point of view, the biggest advantage would be in terms of a
reduction in the overall tax burden on goods, which is currently estimated at 25%-30%
 Inter-State supplies within India would attract an Integrated GST (aggregate of CGST
and the SGST of the destination State).
 In addition to the IGST, in respect of supply of goods, an additional tax of up to 1% has
been proposed to be levied by the Centre. The revenue from this tax is to be assigned to
the origin states. This tax is proposed to be levied for initial two years or such longer
period as recommended by the GST Council.
GST will be a game changing reform for Indian economy by developing a common Indian market
and reducing the cascading effect of tax on the cost of goods and services. It will impact the Tax
Structure, Tax Incidence, Tax Computation, Tax Payment, Compliance, Credit Utilization and
Reporting leading to a complete overhaul of the current indirect tax system.
GST will have a far reaching impact on almost all the aspects of the business operations in the
country, for instance, pricing of products and services; supply chain optimization; IT, accounting
and tax compliance systems.
Game Changer
Function of the Bill
 As Finance Minister Arun Jaitley puts it, the GST bill will lead to the economic
integration of India.
 The main function of the GST is to transform India into a uniform market by breaking the
current fiscal barrier between states. Thus the GST will facilitate a uniform tax levied on
goods and services across the country.
 Currently, the indirect tax system in India is complicated with overlapping taxes levied by
the Centre and the State separately.
 The power to make laws in respect of supplies in the course of inter-State trade or commerce will be vested only in
the Union government. States will have the right to levy GST on intra-State transactions including on services.
 Centre will levy IGST on inter-State supply of goods and services. Import of goods will be subject to basic
customs duty and IGST.
 GST defined as any tax on supply of goods and services other than on alcohol for human consumption.
 Central taxes like, Central Excise duty, Additional Excise duty, Service tax, Additional Custom duty and Special
Additional duty and State level taxes like, VAT or sales tax, Central Sales tax, Entertainment tax, Entry tax,
Purchase tax, Luxury tax and Octroi will subsume in GST.
 Petroleum and petroleum products i.e. crude, high speed diesel, motor spirit, aviation turbine fuel and natural
gas shall be subject to the GST on a date to be notified by the GST Council.
Salient Features
 1% origin based additional tax to be levied on inter-State supply of goods will be non-creditable in GST chain.
The revenue from this tax is to be assigned to the Origin State. This tax is proposed to be levied for initial two
years or such period as recommended by the GST Council.
 Provision for removing imposition of entry tax / Octroi across India.
 Entertainment tax, imposed by States on movie, theatre, etc. will be subsumed in GST, but taxes on
entertainment at panchayat, municipality or district level to continue.
 GST may be levied on the sale of newspapers and advertisements and this would give the government’s access
to substantial incremental revenues.
 Stamp duties, typically imposed on legal agreements by the state, will continue to be levied by the States.
 Administration of GST will be the responsibility of the GST Council, which will be the apex policy making
body for GST. Members of GST Council comprised of the Central and State ministers in charge of the finance
portfolio.
GST has been envisaged as a more efficient tax system, neutral in its application and distributionally attractive.
The advantages of GST are:
 Wider tax base, necessary for lowering the tax rates and eliminating classification disputes
 Elimination of multiplicity of taxes and their cascading effects.
 Rationalization of tax structure and simplification of compliance procedures
 Harmonization of center and State tax administrations, which would reduce duplication and compliance costs
 Automation of compliance procedures to reduce errors and increase efficiency
 Destination principle
 The GST structure would follow the destination principle. Accordingly, imports would be subject to GST, while
exports would be zero-rated. In the case of inter-State transactions within India, the State tax would apply in the
State of destination as opposed to that of origin.
Benefits
GST would replace most indirect taxes currently in place such as:
THANK YOU

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GST Bill Explained

  • 1.
  • 2.  Officially known as: The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014  Introduced by: Arun Jaitely  Published on: 19 December 2014  Date Passed in Lok Sabha: 6th May 2015  Date Passed in Rajya Sabha: Pending Introduction
  • 3.
  • 4. The Government of India seems committed to replace all the indirect taxes levied on goods and services by the Centre and States and implement GST by 2016. With GST, it is anticipated that the tax base will be comprehensive, as virtually all goods and services will be taxable, with minimum exemptions.
  • 5. Understand GST  GST is a value added tax.  Goods and Services Tax" would be a indirect tax on manufacture, sale and consumption of goods and services throughout India, to replace taxes levied by the Central and State governments.  Exports would be zero-rated and imports would be levied the same taxes as domestic goods and services adhere.  The introduction of Goods and Services Tax (GST) would be a significant step in the reform of indirect taxation in India.
  • 6.  From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%  Inter-State supplies within India would attract an Integrated GST (aggregate of CGST and the SGST of the destination State).  In addition to the IGST, in respect of supply of goods, an additional tax of up to 1% has been proposed to be levied by the Centre. The revenue from this tax is to be assigned to the origin states. This tax is proposed to be levied for initial two years or such longer period as recommended by the GST Council.
  • 7. GST will be a game changing reform for Indian economy by developing a common Indian market and reducing the cascading effect of tax on the cost of goods and services. It will impact the Tax Structure, Tax Incidence, Tax Computation, Tax Payment, Compliance, Credit Utilization and Reporting leading to a complete overhaul of the current indirect tax system. GST will have a far reaching impact on almost all the aspects of the business operations in the country, for instance, pricing of products and services; supply chain optimization; IT, accounting and tax compliance systems. Game Changer
  • 8. Function of the Bill  As Finance Minister Arun Jaitley puts it, the GST bill will lead to the economic integration of India.  The main function of the GST is to transform India into a uniform market by breaking the current fiscal barrier between states. Thus the GST will facilitate a uniform tax levied on goods and services across the country.  Currently, the indirect tax system in India is complicated with overlapping taxes levied by the Centre and the State separately.
  • 9.  The power to make laws in respect of supplies in the course of inter-State trade or commerce will be vested only in the Union government. States will have the right to levy GST on intra-State transactions including on services.  Centre will levy IGST on inter-State supply of goods and services. Import of goods will be subject to basic customs duty and IGST.  GST defined as any tax on supply of goods and services other than on alcohol for human consumption.  Central taxes like, Central Excise duty, Additional Excise duty, Service tax, Additional Custom duty and Special Additional duty and State level taxes like, VAT or sales tax, Central Sales tax, Entertainment tax, Entry tax, Purchase tax, Luxury tax and Octroi will subsume in GST.  Petroleum and petroleum products i.e. crude, high speed diesel, motor spirit, aviation turbine fuel and natural gas shall be subject to the GST on a date to be notified by the GST Council. Salient Features
  • 10.  1% origin based additional tax to be levied on inter-State supply of goods will be non-creditable in GST chain. The revenue from this tax is to be assigned to the Origin State. This tax is proposed to be levied for initial two years or such period as recommended by the GST Council.  Provision for removing imposition of entry tax / Octroi across India.  Entertainment tax, imposed by States on movie, theatre, etc. will be subsumed in GST, but taxes on entertainment at panchayat, municipality or district level to continue.  GST may be levied on the sale of newspapers and advertisements and this would give the government’s access to substantial incremental revenues.  Stamp duties, typically imposed on legal agreements by the state, will continue to be levied by the States.  Administration of GST will be the responsibility of the GST Council, which will be the apex policy making body for GST. Members of GST Council comprised of the Central and State ministers in charge of the finance portfolio.
  • 11. GST has been envisaged as a more efficient tax system, neutral in its application and distributionally attractive. The advantages of GST are:  Wider tax base, necessary for lowering the tax rates and eliminating classification disputes  Elimination of multiplicity of taxes and their cascading effects.  Rationalization of tax structure and simplification of compliance procedures  Harmonization of center and State tax administrations, which would reduce duplication and compliance costs  Automation of compliance procedures to reduce errors and increase efficiency  Destination principle  The GST structure would follow the destination principle. Accordingly, imports would be subject to GST, while exports would be zero-rated. In the case of inter-State transactions within India, the State tax would apply in the State of destination as opposed to that of origin. Benefits
  • 12. GST would replace most indirect taxes currently in place such as: