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New indirect tax regime GST comes into effect
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SME Times News Bureau | 01 Jul, 2017
The Goods and Services Tax (GST), India's biggest tax reform since
Independence, rolled out past midnight Friday in the precincts of the
hallowed Central Hall of Parliament to usher in a new indirect tax
regime in an event that sought to evoke memories of the famous 'Tryst
with Destiny' night the country got freedom in 1947.
A minute
after the stroke of midnight, President Pranab Mukherjee and Prime
Minister Narendra Modi pressed the button to launch the new indirect tax
regime on a digital screen with "GST" emblazoned on it in a golden hue.
Conceived
on the principle of 'one nation, one tax, one market', the tax that
subsumes 17 central and state levies was launched in the presence of
Vice President Hamid Ansari, former Prime Minister H.D. Deve Gowda, Lok
Sabha Speaker Sumitra Mahajan, Finance Minister Arun Jaitley, MPs, chief
ministers, state finance ministers, officials of the Centre and states.
Notwithstanding
the fact that the GST Law was a consensus product evolved over 14
years, the function in colorfully-decked Parliament House was boycotted
by major opposition parties like Congress, Trinamool Congress, RJD, DMK
and Left parties, saying the government was making a spectacle of a
legislation for self-promotion, a charge Jaitley rejected. In keeping
with his party's decision, former Primer Minister Manmohan Singh kept
away from the event. However, MPs and leaders of Congress allies NCP and
Samajwadi Party attended the function.
Addressing the
gathering, President Pranab Mukherjee said the introduction of GST is a
moment of precedent for the country and a matter of personal
satisfaction for him because of his role as Finance Minister earlier. "I
had always believed that GST was a matter of time and was happy when it
was enacted and I gave assent to the Constitution amendment last year,"
he said.
He said the new law is a tribute to the maturity and
wisdom of Indian democracy. The GST Council was a unique experiment
under the Indian Constitution because of the shared sovereignty.
In
his speech, Modi said the roll out of GST is the best example of
cooperative federalism and success of Indian democracy. "The credit for
the new law does not go to one party or one government but was a shared
legacy of all," he said.
In a veiled rejoinder to opposition
criticism of the midnight function in Parliament, the Prime Minister
said there cannot be a "better and sacred" venue than the Central Hall
for the historic roll out.
The GST process cannot be confined
to just economic system but was a collective effort of all, he said,
adding it was a product of long discussions among the best brains of the
country. "It is an example of Team India's strength and ability," he
said.
Referring to the eminent personalities like Jawaharlal
Nehru, Sardar Patel, Maulana Abul Kalam Azad and Babu Rajendra Prasad
who had adorned the Central Hall, Modi said like Patel had integrated
the country, the GST would integrate the country economically.
He
described the GST as 'Good and Simple Tax' -- good because there will
be no tax on tax and simple because there will be only one form of tax.
It will also help eliminate black money and corruption because of the
transparency it seeks to bring in, he said.
Modi said whatever was lacking in growth and development of the country, GST will provide the opportunity to realise them.
Ahead
of the launch, the GST Council slashed the rate of fertilisers from 12
per cent to 5 per cent and of exclusive parts of tractors from 28 per
cent to 18 per cent to reduce the burden on farmers.
The launch
of GST, which the government claimed would result in reduction of prices
of articles of common consumption, also came amidst fears from various
business sections that prices would go up under the new regime.
Welcoming
the gathering, Jaitley described GST as the biggest and most ambitious
tax reform which is an achievement of the country through consensus. It
highlights the fact that India can rise above narrow politics and work
for country's benefit. In making the GST, neither the Centre nor the
states gave up their sovereignty.
He said all MPs, state
governments, political parties, state finance ministers and dedicated
officials of the Centre and states deserved to be appreciated for
realising the project of GST Law.
Jaitley said under GST, the revenues will go up as the compliance goes up and the GDP will also increase.
Parliament's
Central Hall has witnessed such a function only on three occasions
earlier. First was on the occasion of Independence when first Prime
Minister Jawaharlal Nehru made the famous 'Tryst with Destiny' speech.
The second was on the occasion of silver jubilee of Independence in 1972
and golden jubilee in 1997.
The GST is expected to check tax
evasion and broaden tax base. In the new regime, all filings will be
done only through electronic mode to ensure non-intrusive
administration. This will minimise taxpayers' physical interaction with
the tax officials.
The GST regime seeks to reduce rates of over
50 per cent of items of daily use and charge others at much lower rate
of 5 per cent, 12 per cent and 18 per cent.
A higher tax rate is
imposed on luxury and sin goods at 28 per cent in the new regime.
Certain services like telephone, banking and insurance are expected to
feel the pinch of higher taxes.
The GST also promises taxpayers a
refund against their sales within 60 days. Similarly, exporters will
get refund within seven days. For protection of consumer rights, the new
law provides anti-profiteering provisions. In a departure from the
normal practice, the GST will be administered together by the Centre and
the states.
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works contract
JK SERVICES | Wed Jul 5 08:28:12 2017
We are the manufactuers, traders of Instrumentation items. Shall we affect any service . If we do supply and erection how much tax will come.
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