1 July: GST Day

1st July 2019 is being celebrated as GST (Goods & Services Tax) Day. This year marks the 2nd anniversary of implementation of historic tax reform of Goods & Services Tax.

Background

First GST Day was celebrated on 1 July 2018, as to mark the first anniversary of new indirect tax regime i.e. Goods and Services Tax (GST). GST was rolled out in intervening night of 30 June and July 1 2017 in a ceremony held in the Central Hall of Parliament.

GST Day 2019

Finance Ministry will be introducing new return system on a trial basis from 1 July 2019 and will make it mandatory basis from 1 October 2019.

Reforms proposed–

Union Ministry of Finance kicked off the celebrations of GST day by coming up with further reforms in Indirect Tax system with introduction of-

New return system: Sahaj & Sugam returns for small taxpayers

Rationalisation of Cash Ledger System: With regards to single cash ledger, Centre will rationalise ledger in a manner that earlier 20 heads are merged into 5 major heads. There is only 1 cash ledger for tax, penalty, interest, fee among others.

Single Refund-Disbursing Mechanism: will come into play wherein government which sanctions refund disburses all four major heads of refunds namely Central Goods & Services Tax (CGST), State Goods & Services Tax (SGST) or Integrated Goods & Services Tax (IGST) and Cess.

Introduction of Composition Scheme: As per FinMin threshold limit of Rs.40 lakh is offered of suppliers of goods as per choice of states. Thus ministry propose to introduce composition scheme for small service providers up to an annual turnover of Rs.50 lakh with a tax rate of 6%, electronic invoicing system in a phase-wise manner for B2B (Business to Business) transactions.

GST Appellate Tribunals: are being established at various state headquarters and also in area benches.

Celebrations:

Anurag Thakur Minister of State (MoS) for Finance and Corporate Affairs will preside over event alongside key secretaries and officials of various departments.

At event Book on ‘GST for MSME’ will be released.

‘GST Commendation Certificates‘ will be awarded to Central Board of Indirect Taxes and Customs (CBIC) officers who worked hard in GST implementation.

What is GST?

Goods & Services is an Indirect Tax levied on the supply of goods and services and which has replaced many Indirect Taxes that previously existed in India. On 29th March 2017, Goods and Service Tax Act was passed in Parliament and Act came into effect on 1st July 2017.

It is one Indirect Tax for entire country and is a multi-stage, comprehensive, destination-based tax that is levied on every value addition.

Under GST regime, tax is levied at every point of sale (PoS). In case of Intra-state sales, Central GST (CGST) and State GST (SGST) are charged and the Inter-state sales are chargeable to Integrated GST (IGST).

GST has transformed India into ‘one nation, one Tax, and integrated country into an Economic Union and into single common market by breaking barriers to inter-state trade and commerce.

Month: Current Affairs - July, 2019