The document summarizes the key aspects of the proposed Goods and Services Tax (GST) Bill in India. It discusses that GST will replace existing indirect taxes and be made up of Central GST and State GST. GST is expected to make the tax system more transparent by eliminating hidden taxes. It will help reduce the cost of doing business and make exports more competitive by not taxing registered retailers. The target implementation date for GST is January 2016.

1. GST BILL: BULL RUN
OR BEAR SLIDE
Central Goods and
Service Tax
State Goods and
Service Tax
Tax Transparency
Competitive Exports
No Hidden Taxes
SWAROOP PANDAO
swarooppandao@gmail.com

2. GST Bill 15/06/2016
Introduction:
The Goods and Services Tax (GST) is a value added tax that will replace all indirect taxes levied on
goods and services by the Government, both Central and States, once it is implemented. GST or Goods
and Services Tax is considered as major Tax reform policy in India which will be implemented from
January 2016 if passed in next Parliament session. Most Economist are very positive about GST
implementation. The GST is all set to consolidate all State economies. This will be one of the biggest
taxation reforms that can boost Indian Economy to some different levels. The basic idea is to create a
single, cooperative and undivided Indian market to make the economy stronger and powerful. The GST
will see a significant breakthrough towards an all-inclusive indirect tax reform in the country.
GST Model:
The dual GST system can be implemented in India and it is actually initiated by Empowered
Committee. GST Bill will be categorized in two parts:
• State Goods and Service Tax (SGST)
• Central Goods and Service tax (CGST)
Excluding few, all goods and services will club under GST and hardly there will be any difference
between goods and services. The GST system will include Central excise duty, additional excise duty,
services tax, State VAT entertainment tax etc.
The GST rate could be around 14-16 per cent, after the implementation of GST Bill, Central and State
can make the decision on their respective rates. Looking at current rates, 10 per cent is levied on
services and the indirect taxes on most of the goods is around 20 per cent.
Summary of GST Bill
1) GST is a kind of transparent tax which will eliminate other taxes. With the help of sales invoice,
customers will be able to get clear idea on how much tax they are paying on the services they
consumed of the product they have bought.
2) GST will not be a cost to registered retailers. There will be no hidden taxes and the cost of
doing business will be lower. This will help Export being more competitive.
3) GST will be charged on manufacturing cost and will be collected at the point of sale. This will
benefit both Central GST and State GST as prices can come down and ultimately consumption
can see rise.
4) Manufacturing and services both will divide the tax burden equally. This ultimately can be done
through lower tax rates by increasing tax base and reducing exemptions.
5) In GST Bill, there will be diversification of income sources for Government other than income
tax and petroleum tax.
6) Octroi, central sales tax, state sales tax, entry tax, license fees, turnover tax etc will no longer
be present and all that will be brought under the GST. Doing Business now will be easier and
more comfortable as various hidden taxation will not be present.