August 3rd, 2016 will be recorded as a red letter day in the history of Indian taxation due to the near unanimous passage of 122nd Constitutional Bill in Rajya Sabha, paving the way for roll-out of GST (Goods and Services Tax) in India from 1st of April 2017. Goods and Service Tax Bill has significantly evolved over the past decade and is touted as the single largest tax reform in India since independence. It is estimated to boost GDP by 1.5 to 2%. ‘One India, One Tax’
will be the new reality with GST subsuming over ten indirect taxes and
making India a common market. Apart from elimination of cascading
effect, the benefits of simplified compliance, technological backing and
uniform process across India will contribute significantly to ‘Ease of doing Business’.
However, the success of a business will significantly depend on the
ability to understand and adopt to this new reality as certain existing
business practices will have to undergo changes.
Goods and Services Tax is a comprehensive tax levied on supply of
goods and services across India. GST (Goods and Services Tax) is a Destination based Consumption tax, and the taxable event is Supply
as against the existing taxable events of sale, manufacture or
provision of service. Draft model GST law was first made public in June
2016, after which the Revised Draft Law was made public on 26th November
2016. It is high time that businesses, industry/trade bodies,
professional associations and the like provide valid inputs at an early
date, and ensure the final GST Law addresses all the concerns to make
the transition smooth.
