GST rollout: India is set to embrace Goods and Services Tax (GST) on July 1 and Prime Minister Narendra Modi wants Union Ministers to go the extra mile to make the single biggest taxation reform since independence successful. PM Modi, who is known as a tough taskmaster, has directed ministers to travel to cities between July 2 and 7 and publicise GST, according to Indian Express report. It has been learned that BJP has been trying to gain much out of the implementation of pan-India tax regime to keep Congress at bay. On the other Congress was also seeking credit for initiating the process of introducing GST, according to IE report. GST is likely to boost GDP by 1-2 per cent and bring down inflation by 2 per cent over the long term, according to PTI report. A uniformity of tax rates and structures will lead the country toward a more efficient, less corrupt economy, according to Reuters.
Earlier, PM Modi had reviewed the preparedness for the new indirect tax regime during a meeting. The meeting was attended by Finance Minister Arun Jaitley, Revenue Secretary Hasmukh Adhia and senior officers from the Central Board of Excise and Customs (CBEC). This was the first review by the PM after the GST Council finalised the rates, and the second since May 2.
All goods and services have been put in slabs of 5, 12, 18 and 28 per cent, with the exception of gold and precious metals, which will attract 3 per cent GST, and rough diamond at 0.25 per cent GST. Items like salt, milk, gur, egg, curd, unpacked foodgrain and paneer, fresh vegetables, unbranded atta, maida, besan, honey, besides education and health services, have all been exempted from GST. Tea, sugar, coffee beans, edible oil, packed paneer, milk powder, brooms, domestic LPG and kerosene have been put in the 5 per cent bracket. GST will subsume 16 different taxes, including excise, service tax and VAT, and make India a single market for seamless movement of goods and services.
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Meanwhile, there won’t be any centralised registration for banks under the GST as the central government had ruled out the idea and asked for separate registration for each state they operate in. Banks have been demanding a single centralised registration system. They felt multiple registrations would create procedural and compliance problems. A top finance ministry official had said that banks have no choice and issues relating to registration which will be resolved in due course.
Traders’ body CAIT had cast aspersion over the preparedness for GST among small businesses saying it remains a major challenge. They had said that the traders are mostly ill-equipped in terms of technology which is a pre-requisite for complying with the new tax regime. CAIT Secretary General Praveen Khandelwal said that till the time traders across the country are equipped with technology, some in between measures need to be adopted to help them in GST compliance through digital technology.