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The Much Touted GST on the Verge of Passage in the coming fall of 2018—How It Will Work?

GST was once a political football during the ruling of the United Progressive Alliance, but it seems that after all the dribbling and gimmicks played by the then ruling government, it failed to reach its goal. But the same GST with a clear mandate by the National Democratic Alliance has found out its goal post. With the commencement of the year 2018, the much touted and debated GST will be on the books and functional.

Why GST Is Anticipated As a Radical Tax Reform?

The Indian tax system has been shrouded in complexities and with the passage of the GST bill, it will do away with tax imposition based on boundaries and borders with other states. GST will lead to uniform pricing across the country owing to the same taxation imposed right from the manufacture to the selling point.

What type of GST will prevail in India in the coming fall of 2018?

As per the recommendation of the finance minister, the Indian economy will have dual GST with center and state levying taxes on the goods. The center will follow the intra-state supply of goods and services, whereas, the state will follow state level GST. In case an integrated GST on goods and consumption has to be imposed, it will be managed and administered by the center.

How Existing businesses can migrate to GST from the existing VAT/Sales Tax/Service Tax

  • You need to get the provisional ID and password for enrolment from the State VAT/Service Tax/Central excise portal.
  • You need to enroll on the portal with the password and user name which you have created. This will be provided once you have got the provisional ID and this will be used as your password for enrolment.
  • You need to login to the GST Portal with the new user name ID and password.
  • An enrolment form will open and you need to provide all the details of the business.
  • Verify all the details from your Sales and Service tax forum.
  • Attach all the documents
  • Digitally sign the document
  • Upon receiving the application, you will get an application reference number. This will change the status of the business from existing to migratory tax payer of GST but inclusion in the GST list will only happen after the interview.
  • Once they have received the activation status, the GST portal would be active and the tax payers or businesses can function normally.

The taxes which would be submitted under the ambit of GST?

Taxes collected by Center?

  • Central Excise duty
  • Duties of Excise (Medicinal and Toilet Preparations)
  • Additional Duties of Excise (Goods of Special Importance)
  • Additional Duties of Excise (Textiles and Textile Products)
  • Additional Duties of Customs (commonly known as CVD)
  • Special Additional Duty of Customs (SAD)
  • Service Tax
  • Central Surcharges and Cesses, so far as they relate to supply of goods and services

State Taxes submitted by the state to the center

  • State VAT
  • Central Sales Tax
  • Luxury Tax
  • Entry Tax (all forms)
  • Entertainment and Amusement Tax (except when levied by the local bodies)
  • Taxes on advertisements
  • Purchase Tax
  • Taxes on lotteries, betting and gambling
  • State Surcharges and Cesses so far as they relate to supply of goods and services

Commodities Left outside the ambit of GST?

  • Alcohol for human consumption,

(ii)    Petroleum Products viz. petroleum crude, motor spirit (petrol), High speed diesel, natural gas and aviation turbine fuel

(iii)   Electricity

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