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Once these bills are approved by Parliament and a separate one is approved by all state assemblies, the legislative process for GST roll out will be completed. The one-nation-one-tax regime will merge central taxes like excise duty and service tax and state levies like VAT.
Four-tier tax slabs of 5, 12, 18 and 28% along with an additional cess on demerit goods like luxury cars, aerated drinks and tobacco products was passed last week by the parliament, while the process of putting various goods and services in different slabs will start from next month.
"The Union Cabinet chaired by Prime Minister
While the CGST Bill makes provisions for levy and collection of tax on intra-state supply of goods, services or both by the central government, the IGST Bill makes provisions for levy and collection of tax on their inter-state supplies.
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On the other hand, the UTGST Bill makes provisions for levy on collection of tax on intra-UT supply of goods and services in the Union Territories without legislature, and is similar to States Goods and Services Tax (SGST), to be levied and collected by the States/Union Territories on intra-state supply of goods or services or both. This has to be approved by each of the state assemblies.
The Compensation Bill provides for compensation to the states for loss of revenue arising on account of implementation of the GST for a period of five years from the roll out.
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GST, the biggest tax reform since India got independence is expected to accelerate the rate of economic growth by at least 0.5 percentage points, while also broadening the revenue base and cutting compliance cost for firms.
(Image source: TomorrowMakers)