New Delhi: Goods and Services Tax is likely to be rolled out on July 1, 2017. Economic Affairs Secretary Shaktikanta Das while speaking to reporters on Tuesday said: “GST implementation is a huge one and that is going to be implemented by July 1. Both federal and state government are working on this one.”
Das’ statement put an end to uncertainties over the implementation of GST. Last year in August, the Rajya Sabha cleared a bill that amended the Constitution to enable India’s biggest tax reform – GST.
However, there were many issues -division of tax administration, taxing high sea trade, compensation for revenue loss – that were to be resolved between federal and state governments. And, it was feared that GST could not be cleared before September.
After rounds of discussion over revenue loss, the GST Council last month approved a law to compensate states for any loss of revenue from the implementation of the new taxing system.
GST is a proposed system of indirect taxation merging most of the existing taxes into single system of taxation. It was introduced as The Constitution (One Hundred and First Amendment) Act 2016.
GST would be a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India, to replace taxes levied by the central and state governments.
The GST is consumption based tax levied on the supply of Goods and Services which means it would be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method. Once it is in force, GST will replace at least 17 state and federal taxes.