GST Definition, Objective, Framework, Action Plan, GST Scope 2021

A Brief on GST Bill: Complete details for Goods and Service Tax like – Historical Background of GST, Definition of GST, Objective of GST, Regulatory Framework of GST, Action Plan of GST Council, Scope of GST etc. Recently we provide complete details regarding “Whether GST is ready to move on by July 2017?” Now you can scroll down below and check more details for “GST Definition, Objective, Framework, Action Plan & Scope”

GST Definition, GST Objectives

Historical background of GST

GST was first recommended by Kelkar Task Force on implementation of Fiscal Reforms and Budget Management Act 2004 but the First  Discussion Paper on Goods and Services Tax in India was presented by  the Empowered Committee of State Finance Ministers dtd.10th Nov.10th,  2009.

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In 2011, the Constitution (115th Amendment) Bill, 2011 was introduced in Parliament to enable the levy of GST. However, the Bill lapsed with the dissolution of the 15th Lok Sabha.

Subsequently, in December 2014, the Constitution (122nd Amendment) Bill, 2014 was introduced in Lok Sabha. The Bill was passed by Lok Sabha in May 2015 and referred to a Select Committee of Rajya Sabha for examination.

Government is endeavoring to roll out GST by 1st July, 2017, by achieving consensus on all the issues relating thereto. It is geared to attain July 1 deadline for implementation of GST across India.

GST is a path breaking indirect tax reform which will create a common national market by dismantling inter-State trade barriers. GST has subsumed multiple indirect taxes like excise duty, service tax, VAT, CST, luxury tax, entertainment tax, entry tax, etc.

France was the first country to implement GST in the year 1954. Within 62 years of its advent, about 160 countries across the world have adopted GST because this tax has the capacity to raise revenue in the most transparent and neutral manner.

GST Bill Passed in Rajya Sabha & Lock Sabha

When GST is Applicable – Modi Government Want to applicable GST Bill From 1st July 2017, for more details about GST Applicability please visit on following link..

Must Read – When will GST be applicable

Definition of GST

“GST is a tax on  goods and services with value addition at each stage having  comprehensive and continuous chain of set of benefits from the  producer’s / service provider’s point up to the retailers level where  only the final consumer should bear the tax.”

Must Read – Salient Features of GST

Objectives of GST

• One Country – One Tax
• Consumption based tax instead of Manufacturing
• Uniform GST Registration, payment and Input tax Credit
• To eliminate the cascading effect of Indirect taxes on single transaction
• Subsume all indirect taxes at Centre and State Level under
• Reduce tax evasion and corruption
• Increase productivity
• Increase Tax to GDP Ratio and revenue surplus
• Increase Compliance
• Reducing economic distortions

Features of GST Constitution Amendment Act

• Concurrent jurisdiction for levy & collection of GST by the Centre (CGST) and the States (SGST)
• Centre to levy and collect IGST on supplies in the course of inter-State trade or commerce including imports
• Compensation for loss of revenue to States for five years
• GST on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas & aviation turbine fuel to be levied from a later date on recommendations of Council

Must Read – Why GST For India

Legislative Framework

There is single legislation – CGST Act, 2017 – for levying CGST. Similarly, Union Territories without State legislatures [Andaman and Nicobar Islands, Lakshadweep, Dadra and Nagar Haveli, Daman and Diu and Chandigarh] will be governed by UTGST Act, 2017 for levying UTGST. States and Union territories with their own legislatures [Delhi and Puducherry] have to enact their own GST legislation for levying SGST. Though there would be multiple SGST legislations, the basic features of law, such as chargeability, definition of taxable event and taxable person, classification and valuation of goods and services, procedure for collection and levy of tax and the like would be uniform in all the SGST legislations, as far as feasible. This would be necessary to preserve the essence of dual GST.

Regulatory Framework of GST

A new set up by Government of India named as ‘GST Council’. GST Council constituted w.e.f. 12.09.2016

The GST Council consists of

• (a) the Union Finance Minister (as Chairman),
• (b) the Union Minister of State in charge of Revenue or Finance, and
• (c) the Minister in charge of Finance or Taxation or any other Minister, nominated by each state government.

All decisions of the GST Council will be made by three fourth majority of the votes cast; the centre shall have one-third of the votes cast, and the states together shall have two-third of the votes cast.

• Threshold limit for exemption to be Rs. 20 lakh (Rs. 10 lakh for special category States)
• Compounding threshold limit to be Rs. 50 lakh – not available to inter-State suppliers, service providers (except restaurant service) & specified category of manufacturers
• Government may convert existing area based exemption schemes into reimbursement based scheme

Must Read – Introduction, Meaning and Purpose of GST

Action Plan of GST Council

• List number of Taxes, cesses, and surcharges to be subsumed under GST
• Preparation of list of goods and services subject to, or exempt from GST
• Determination of threshold limit of turnover for application of GST
• Fixation of rates
• Preparation of model GST Laws, principles of levy, apportionment of tax benefits
• Firming up Place of supply Rules
• Recommend on Compensation to states losing on revenue post implementation of GST, subject to maximum time limit of 5 years.
• Passage of SGST laws by all State legislatures
• Recommendation of Model GST Rules by GST Council
• Notification of GST Rules
• Recommendation of GST Tax rates by GST Council
• Establishment and upgradation of IT framework
• Meeting implementation challenges
• Effective coordination between Centre & State tax administrations
• Reorganization of field formations
• Training of Officials
• Outreach programs for all stakeholders including Trade & Industry

Must Read – Goods and Service Tax Bill (GST Bill) – An Overview

Scope of GST

GST shall cover all goods and services, except alcoholic liquor for human consumption, for the levy of goods and services tax. In case of petroleum and petroleum products, it has been provided that these goods shall not be subject to the levy of Goods and Services Tax till a date notified on the recommendation of the Goods and Services Tax Council.

Promulgation of GST Council: Proposed Article 279A of the Bill provides for constitution of Goods and Services Tax Council to examine issues relating to goods and services tax and make recommendations to the Union and the States on parameters like rates, exemption list and threshold limits. The Council shall function under the Chairmanship of the Union Finance Minister and will have the State Union Minister as its members.

• All goods and services are covered under GST Regime except Alcoholic liquor for Human Consumption,
• Tobacco Products subject to levy of GST and Centre may also levy excise duty
• GST Council yet to decide the incidence and levy of GST on following;
  • a)Crude Petroleum
  • b)High Speed Diesel (HSD)
  • c)Motor Spirit (Petrol)
  • d)Natural Gas
  • e)Aviation Turbine Fuel

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Advantages of GST

CBEC has released few advantages which would accrue to Citizens, Trade/Industry and the Central/State Government with the introduction of GST. The advantages to the Citizens are listed as:

• a. Simpler tax system.
• b. Reduction in prices of goods and services due to elimination of cascading.
• c. Uniform prices throughout the country.
• d. Transparency in taxation system.
• e. Increase in employment opportunities.

The advantages accruing to the Trade/ industry are listed as:

• a. Reduction in multiplicity of taxes.
• b. Mitigation of cascading/double taxation.
• c. More efficient neutralization of taxes especially for exports.
• d. Development of common national market.
• e. Simpler tax regime-fewer rates and exemptions.

The advantages accruing to the Central/State Government are listed as:

• a. A unified common national market to boost Foreign Investment and “Make inIndia” campaign.
• b. Boost to export/manufacturing activity, generation of more employment,leading to reduced poverty and increased GDP growth.
• c. Improving the overall investment climate in the country which will benefit thedevelopment of states.
• d. Uniform SGST and IGST rates to reduce the incentive for tax evasion.
• e. Reduction in compliance costs as no requirement of multiple record keeping.

Must Read –

• GST Definition, Objective, Framework
• Key Features of GST
• GST Annual Return
• Tax layers under proposed GST Model
• Filing of GST Returns
• GST on E- Commerce Transactions
• Returns Under GST
• GST Current Tax Structure
• Expected Scheme of GST

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