GST – Goods and Services Tax, Biggest Indirect Tax Reform which will merge different kind of Taxes under one umbrella with a them of One Nation One Theme.
As the Implementation of GST is near and date is final – July 1, 2017.
Opposition Political Parties are in full aggression using their paid IT Workers to spread rumours and confusions and acting as Obstruction in GST implementation.
The biggest rumour was spread two days back that – GST Implementation is delayed and it will be implemented in September. This rumour has been smashed by Hansumkh Adhiya, Secretary of Finance who Yesterday confirmed that GST will be implemented on July 1 only across the Nation.
This Article will address all the major rumours which is being spread on Social Media through Facebook and WhatsApp majorly.
- Government says GST is One Nation One Tax then why there is so many tax rates ?
This rumour is completely baseless There is a big difference between the concept of One Nation One Tax and having Different Tax Slab.
There are many article floating with a title – Is GST Really One Nation One Tax or It is Again a Tax Net ?
What is the meaning of One Nation One Tax ?
It means That Tax Applied on any commodity will be same throughout the Nation breaking all state Boundaries. Earlier On the same commodity State Government had applied different tax and manufacturers have to pay different tax in different state making the whole supply chain system complex. Now all Indirect Tax have been submerged into one GST. Now manufacturer of MP or Andhra or Jammu will pay same tax if they are manufacturing same commodity. This is meaning of One Tax One Nation.
There is another post in which GST rates are getting compared with other country and saying that why Petrol and Alcohol is kept outside and Why BJP passed it when they object it in Congress time ?
Let me answer one by one.
GST Tax Rate in India
First of all clear your head that all commodities are not under 28% Tax and understand the Bracket
1. All Important and daily use items have no tax like Agro and eatable products. Education and Health Services are also Non Taxed.
2. 5% Tax Slab – This Tax Slabs are made on the basis of priority. In 5% Tax slab many commodity lie which is of daily usage.
3. 12% Tax Slab – Same Concept here also.
4. 18% Tax Slab – Upto this Slab 87% of Commodities gets covered
5. 28% Tax Slab – This is made for Taxing Luxurious Items
If you want to read which commodity lie in which bracket you can read in a very simple format here
Now Let me answer the propaganda – Propaganda done by Opposition Parties is this that Government is Taxing people 28% But the reality is 87% comes under 18%, Maximum Daily Usage is either No Tax or Under 5%.
Thus I believe you get a clear understanding what is the meaning of different Tax Slabs.
Who decides GST Tax Slabs and Who decides which goods are necessary and which Goods are Luxurious?
It is decided independently by a constitutional body called as GST Council. States represent 3/4 power to decide. Thus there is no onus on Center, It is a complete democratic and cooperative federal structure which takes decision.
Why we can’t compare with other country ?
Some people compared Indian GST Tax Rate with Other Country Tax Rate – Let me know How can you do that? Each and Every Country has its own Economy and Prosperity Status. Each Country has its different demands. Each Country Builds Taxation System based on their demand to fulfill People Dream. By the way still If you compare Tax Rate from other Country we are either Low or same for maximum Commodities. In India There are different kind of Manufacturers from Large to Medium to Small and Hence Tax Rates can’t be same as per other country. That’s why Tax Slabs are there.
Petrol and Alcohol is out of GST because States want that. GST Tax Rates are decided by GST Council and Decision Taken in GST Council is by Vote of State and Center. State contains power of 3/4. State think that keeping Petrol and Alcohol in GST will be a loss to them.
But Center Financial Secretary asked them to reconsider it as it will be benefit for them. It will be inside GST soon within Year or Two.
Why BJP opposed When Congress wants to pass it ?
BJP opposed it because of the loss of state revenue. Congress was not addressing the problem of loss to State. BJP first passed recommendations of 14th Finance Commission which gives 65% Share of Tax to States. Earlier in 14th Finance Commission it was Center which was taking 65%. Now state takes it. Apart from that Center supports States for 5 Years if there is Compensation Loss.
After Resolving Compensation Issue then only BJP passed GST.
At the end I will request all readers to not pay attention to WhatsApp messages and only believe in credible information given by Government of India specially Ministry of Finance. It is because all information are unverified which is being floated intentionally to derail the process of Implementation.