GST roll-out: Transformation of indirect taxation landscape
The biggest tax reform since independence -- the Goods and Services Tax (GST) -- will pave the way for the realisation of one nation-one tax-one market, the government said on Friday.
"GST will make India a common market with common tax rates and procedures and remove economic barriers. GST is largely technology driven and will reduce the human interface to a great extent," the Finance Ministry said here in a statement.
Under the GST regime, exports will be zero-rated in entirety, unlike the present system where a refund of some of the taxes does not take place due to fragmented nature of indirect taxes between the Centre and the states.
GST Application on Payment has been operationalised. Twenty-five banks have been integrated with the GST common portal and will be providing e-payment and over the counter payment facilities as well as payment through NeFT/RTGS and credit/debit card.
The GST Council has decided the final structure of GST as follows:
- The threshold limit for exemption from levy of GST is Rs 20 lakh for the states except for the special category, where it is Rs 10 lakh.
- A four slab tax rate structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent have been adopted for GST.
- A cess would be levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the GST rate of 28 per cent for payment of compensation to the states.
- The threshold for availing the Composition scheme is Rs 75 lakh except for special category states where it is Rs 50 lakh and they are required to file quarterly returns only. Certain categories of manufacturers, service providers (except restaurants) are out of the Composition Scheme.
- GST provides for the facility of auto-populated monthly returns and annual return.
- Anti-profiteering provisions for the protection of consumer rights.
Role of GST Network (GSTN): IT backbone of GST
GSTN has been created as a section 25 private limited company with strategic control with the government, to function as a common pass-through portal for taxpayers.
On this common portal, taxpayers will submit their registration applications, file returns, make tax payments and claim refunds. GSTN has been provided with a robust IT platform and it will provide an interface to 80 lakh taxpayers and thousands of tax officials.
All filings under GST will be done electronically. While GSTN remains a front-end, at the back end, the IT systems of Central Board of Excise and Customs (CBEC) and different states interface with the GSTN IT network to provide a seamless end to end processing of tax returns for the taxpayers.
Also, 64,000 officials have been trained on the GST portal from February till June 2017.
Enrolment of existing taxpayers of the State tax administrations and the CBEC to the GST system commenced on November 8, 2016. More than 66 lakh taxpayers have activated their account at the GST portal.
Journey of GST after the Constitutional Amendment Act, 2016.
After the assent of President Pranab Mukherjee on September 8, 2016, the 101st Constitutional Amendment Act, 2016 came into existence. The GST Council was constituted on September 15, 2016.
On March 29, 2017, Finance Minister Arun Jaitley tabled four Goods and Services Tax (GST) Bills for consideration and passage in the Lok Sabha namely -- The Central Goods and Services Tax (CGST) Bill, 2017, The Integrated Goods and Services Tax (IGST) Bill, 2017, The Union Territories Goods and Services Tax (UTGST) Bill, 2017 and the GST (Compensation to States) Bill, 2017.
They were passed by the Lok Sabha on March 29, 2017, and by the Rajya Sabha on April 6, 2017.
Re-organisation of CBEC
Implementation of GST necessitated the reorganisation of CBEC formations for the administration of GST. The reorganisation involved bringing about structural changes and redeployment of human resources. Redeployment has been done to ensure outreach to the remotest corner.