GST is Going to be executed from 1st July 2017 in India. GST Goods and Service tax is common tax instead of different taxes. The following taxes will be bound together by the GST:
- Central Excise Duty
- Commercial Tax
- Value Added Tax (VAT)
- Food Tax
- Central Sales Tax (CST)
- Entertainment Tax
- Entry Tax
- Purchase Tax
- Luxury Tax
- Advertisement tax
GST is levied on all transactions like sales, transfers, purchases, barters(Exchange of Goods or services without money), lease, import of goods and/or services.
India is going to implement a dual GST model, meaning that taxation is administered by the Union as well as State Governments.
1. Central GST by the Central Government
2. State GST (SGST) by the government of state (Transactions made within a single state)
3. An Integrated GST (IGST) by the Central Government (For inter-state and imported goods or services)
IGST complicates tax collection for State Governments by disabling them to collect the tax owed to them directly from the Central Government. Under the previous system, a state would have to only deal with a single government in order to collect tax revenue.
GST is a consumption based tax, therefore, taxes are paid to the state where the goods or services are consumed not the state in which they were produced.
A 21 members committee was formed to look into the proposed GST law. State and Union Territory GST laws were passed by all the states and Union Territories of India except Jammu & Kashmir, for smoother execution of the tax from 1 July 2017. There will be no GST on the sale and purchase of securities. That will continue to be handled by Securities Transaction Tax. STT is a tax payable in India on the value of securities transacted through a stock exchange. As of 2016, it is 0.1% for delivery based equity trading.
The major features of the proposed payments procedures under GST are as follows:
- Electronic payment process no generation of paper at any stage
- Single point interface for challan generation GSTN
- Ease of payment – payment can be made through online banking, Credit Card/Debit Card, NEFT/RTGS and through cheque/cash at the bank
- Common challan form with auto population features
- Use of single challan and single payment instrument
- Common set of authorized banks
- Common Accounting Codes