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GST
(Goods & Services Tax) Law which is to be implemented in India by July’1,
was made public in November 2016. GST provides for maximum rate of tax under
the new regime i.e. at 14 per cent (14 per cent central GST and an equal state
GST, taking the total to 28 per cent).
The peak
tax rate will rise up to 20 per cent, from the current 14 per cent, in the
model goods and services tax Bill, which will preclude the requirement of
approaching Parliament for any change in rates in future.
The
change in the peak rate, under GST bill will not tinker the 4-slab rate
structure of 5, 12, 18 and 28 per cent agreed upon last year, GST council has
only kept the upper cap higher at 20% so that in future in case of need of hike
tax rate, there is no need to approach Parliament for a nod and the GST Council
can raise it itself.
Decided 4
tier structure will hold for now, this means the central GST and state GST can
be up to 20 per cent each, leaving the scope for a maximum levy at 40 per cent.
Like the
model GST law, the CGST, SGST and UTGST law will be firmed up by the Centre,
states and Union Territories, respectively.
Forthcoming
session beginning from this March’9, Centre plans to introduce in parliament
the Central GST (CGST) bill. After its ratification, the state will look
forward to introduce State GST (SGST) in respective legislative assemblies.
Which
goods & services will fall in which section is yet to be taken care of
& after that’s done same will be taken to the Council for approval soon.
So, we can assume that final approval will come by mid March only as next meet
for GST will held on March 16.
While
it’s still not sure which goods & services will fall in which segment, it’s
almost quite that “Real-estate will come under GST, lots of black money finds
its way in real-estate & everybody knows that. For curbing that, this step
will be taken.”
Healthcare
sector will not come under GST. As this sector caters the health needs of
people, it should be kept aside from the purview of GST; otherwise it would be
impossible for common people to access medical care which will be expensive
& unaffordable. Currently Healthcare is out for service tax & similar
will be followed even after its implementation as if GST levied on Healthcare,
country will never reach the much avowed goal of providing Universal Healthcare
coverage will not be possible. So, currently even Healthcare premium will be
exempted from GST, in fact there will be a raise in tax exemption of 5,000-
20,000 on preventive health checkup to reach the goal of Universal Healthcare
coverage.
Large
number of items like food & other essential household items will be
exempted from purview of GST. New amended GST bill will also affect the automobile
sector positively while boosting the demand in the market as with the GST in
place, taxes levied by the centre like excise duty and state levels taxes like
sales tax, road and registration tax would all be subsumed into one. While
following the 4 slab system the lowest slab tax rate will be implicated to the
smaller cars making it easy to buy for common people.
As India
aspires to evolve from a developing country to a developed nation, Indian
economy with fastest growth rate is making an impact globally. The steps taken
will change the pattern substantially of how Indian’s have been living and
spending till now, while affecting present & future lives of people for
better.
SameerMalhotra (CEO, Shriram Automall) said: “With implementation of GST in near future,
I can see Indian economy grow with a boom, while delivering uncommon results to
the citizens. Being in the used automobile industry, I always focused on
evolving people from being a driver to an owner of the asset & with GST
implemented I can see that dream coming true for many.”
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