India Sales Tax Milestone a Step Closer With New Series of Bills

by Dramelin 8:00 AM 0 comments

Raft of state and federal levies to be replaced with GSTFinance Minister Arun Jaitley has introduced a range of bills to parliament, including legislation that sets out the compensation to be provided to states under India?s landmark new sales tax law.
The nationwide tax will replace more than a dozen levies at both the federal and state level, reducing the cost of production and promoting free flow of trade, the government said.
Read more: How India?s New Tax Might Help Business: QuickTake Q&ALawmakers need to approve these bills in the ongoing parliament session to meet the government?s deadline of implementing the goods and services tax on July 1, and also frame rules about rates for various products and services.
The parliament session ends on April 12.
Read more: The Less-Than-Perfect Tax That?s Still a Game-ChangerHere are the key points of the bills introduced in the lower house:Central Goods and Services Tax Bill 2017CGST to replace a web of levies including central excise duty, central sales tax and service taxCGST to replace a web of levies including central excise duty, central sales tax and service tax Proposed law will harmonize the indirect tax system in the country as well as reduce the cost of production and inflation in the economyMaximum GST rate of 20 percent to be levied on all goods and servicesE-commerce operators to collect up to 1 percent tax at sourceProposed law to provide for self-assessment of taxes payableProposed law provides for an anti-profiteering clause to ensure that businesses pass on the benefit of reduced tax incidence on goods/services to consumersIt also lays down transitional provisions for the smooth transition of existing taxpayers to the new tax systemIntegrated Goods and Services Tax Bill 2017IGST to be levied on inter-state trade -- it will allow businesses to take credit for the tax paidIGST to be levied on inter-state trade -- it will allow businesses to take credit for the tax paid Tax rate to be capped at 40 percentSuppliers of online information and database access (for instance downloading content from, say, Netflix) will have to pay taxIt will ensure refund of GST paid by tourists leaving IndiaGST (Compensation to States) Bill 2017