The revenue foregone by the states as a result of transition to GST will be compensated by the Union government.

Context: Government all set to implement “One nation-one ration card” scheme throughout India by 30th June, 2020. Only centre can levy IGST (Intersect Supply of Goods and Services) and imports.

A system of seamless tax-credits throughout the value-chain, and across boundaries of States, would ensure that there is minimal cascading of taxes. For mains: Need for, significance of the scheme and challenges in its implementation. Law made by parliament in relation to GST will not override state laws on GST.

GST (one hundred and twenty-second-122 constitutional amendment) bill has finally, been passed in the Lok Sabha and the Rajya Sabha. Cross utilization of credit of CGST between goods and services would be allowed.

About the scheme: One Nation One Ration Card (RC) will ensure all beneficiaries especially migrants can access PDS across the nation … Likewise, as CENVAT, State VAT covers only sales. To this, the Finance minister has said that since the target consumer of goods and services have different capabilities and therefore there must be a system similar to the democratic lines where higher value consumer pays more taxes . Tamil Nadu has opposed the proposal of the Centre, saying it would result in undesirable consequences and is against federalism. Now, this can be a tricky situation for the centre as to whose interests it should protect.

“Make in India” Programme is focused for strengthening and protecting the domestic industry from foreign import.

GST does not tax or get into specific commodities. VAT reduces tax erosion because a seller pays VAT on his sales but gets a refund of VAT paid by him on previous purchase. Cess ( education, Krishi Kalyan, Swatch Bharat) and surcharges charged by centre are currently not part of GST. Electronic payment process- no generation of paper at any stage, Single point interface for challan generation- GSTN, Ease of payment – payment can be made through online banking, Credit Card/Debit Card, NEFT/RTGS and through cheque/cash at the bank, Common challan form with auto-population features, Use of single challan and single payment instrument.

Major features of the proposed registration procedures under GST: Major features of the proposed returns filing procedures under GST: Major features of the proposed payment procedures under GST: Advantages of GST For business and industry. Further, due abolition of multiple taxation, the warehousing practices adopted by large industrial houses are expected to come down. In this, the recommendations of FFC, GST and other policies on the anvil are only stepping stones.

Sellers can claim credit only against VAT paid on previous purchase. Further, economists argue that taxation powers are not only a measure of resource mobilisation.

The next stage is that of the good passing from the.

Hence, there has to be more consensus on the structure, pattern and working of the GST council. The Central GST and the State GST would be levied simultaneously on every transaction of supply of goods and services except on exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. One Nation One FASTag What to study? Indirect tax rates and structures would be uniform across the country, thereby increasing certainty and ease of doing business. Taxable event at manufacturing point itself forms a narrow base.

Hence, it can sometimes increase the cost of production and lead to uncompetitive prices.

Prone to corruption: Every state has its own rules for Public Distribution System (PDS).

Each state has its own socio-economic-political reasons to decide the type of tax to be levied. For the consumer Single and transparent tax proportionate to the value of goods and services: (For example producing states like Gujarat and Maharashtra might want low taxation on manufacturing of cotton textiles related goods, and consumption states like Haryana, Uttar Pradesh might want high rate of taxation on retail sales of these goods leading to conflict). They opine for a more flexible weights based voting pattern and reduction in the weightage of the centre’s vote.

The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost.
Simultaneous power upon Parliament and the State Legislatures to make laws governing goods and services tax; Tax will be levied on every supply of goods and services.

The exempt sectors are not allowed to claim any credit for the Cenvat or the Service Tax paid on their inputs. | UPSC – IAS, 5G technology in India – Advantages and Challenges | UPSC – IAS, Global Warming Causes and Climate Change Effects | UPSC – IAS, Reads the information off a customer’s credit or debit card, Checks whether the funds in a customer’s bank account are sufficient, Transfers the funds from the customer’s account to the seller’s account (or at least, accounts for the transfer with the credit card network), Records the transaction and prints a receipt. States might have an issue over this. Public Distribution System objectives, functioning, limitations, revamping; issues of buffer stocks and food security.

Input credit set-off is not available against different taxes. It is available for the purchase of goods made within the state by a registered dealer from another registered dealer. GST Constitutional Amendment cleared: What’s the road ahead? 70/-. The Centre will transfer to the importing State the credit of IGST used in payment of SGST.

This will require a lot of technological and institutional capacity building. The intrastate transaction gets input credit set off but not inters state transaction. When the first elections to the Lok Sabha took place in 1951-52, 53 parties contested the elections, around 1874 candidates participated and poll expenses were 11 crore.

This will provide the adequate thrust and driving force for the success of.

Hence, this clearly indicates that centre and states need to co-operate with each other to ensure a smooth functioning of the tax administration. Goods Services Tax GST One Nation One Tax 2 For UPSC Current Affairs. In other words, GST would make doing business in the country. 100/-, is, say, Rs. The situation in Kerala is quite different than the situation in Tamil Nadu or Assam or Bihar or West Bengal. Multiple indirect taxes at the Central and State levels are being replaced by GST. Keeping in mind the federal structure of India, there will be two major components of GST – Central GST (CGST) and State GST (SGST). It actually accelerates the reconfiguration of centre-state fiscal relations already underway. GS Paper II: Your email address will not be published. A brief chronology outlining the major milestones on the proposal for introduction of GST in India is as follows: State-level VAT/sales tax and interstate tax were not altered. The experts argue that, States would become key stakeholders in the national economy, which was quite rare in the present scheme of things. These have a very high inter-connectivity with both manufacturing and service costs which might hinder seamless application of GST across sectors.
VAT applies at manufacturing stage (CENVAT) as well as Sales stage (State level VAT). The Government of India is working on a plan to start “One Nation One Ration Card” scheme for the beneficiaries, mainly migrant workers, to access the Public Distribution System from any PDS shop across the nation.. Levy of Excise Duty on manufacturing point: Complexity in determining the nature of transaction: Procedure for adopting GST Constitution Amendment bill. For Mains: Benefits, challenges in implementation and significance of the scheme. Today it stands passed by both the Houses of Parliament, pending approval from more than 50 per cent of the states. The most discussed consequence of the passage of GST bill is the fiscal federalism. Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Centre only can tax services. Compensation to States: Approach to the Civil Services Examination: In mains focus will be on effect of GST on Indian economy, federal structure (centre-state relations) and analysis of the new Indirect taxation structure. Health concerns ratify the higher rate of tax on tobacco. Unlike in the present regime, the States where imported goods are consumed will now gain their share from this IGST paid on imported goods. Latest Current Affairs in July, 2020 about One Nation One Tax policy. Goods and services are currently taxed separately. CENVAT applies only to the manufacturing stage and does extend down to the distribution stage until the retail sale of goods. The registration number will be PAN based and will serve the purpose for Centre and State. Enter your email address to subscribe to this blog and receive notifications of new posts by email. This would reduce hidden costs of doing business.

A POS terminal generally does the following: Notify me of follow-up comments by email. For eg: set off not available for CENVAT against state VAT.

No cross utilization of credit would be permitted.

Producing and consuming states might have different viewpoints regarding rate of taxation. In case of inter-State transactions, the Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supplies of goods and services under Article 269A (1) of the Constitution. What is the experience so far? A proposal to introduce a National level Goods and Services Tax (GST) by April 1, 2010 was first mooted in the Budget Speech for the financial year 2006-07. Centre & State to have concurrent powers to make laws on goods and services. (For example producing states like Gujarat and Maharashtra might want low taxation on manufacturing of cotton textiles related goods, and consumption states like Haryana, Uttar Pradesh might want high rate of taxation on retail sales of these goods leading to conflict).

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