The government is all set to roll out the goods and services tax (GST) at the stroke of the midnight on June 30, 2017.
All states/union territories, except Jammu & Kashmir, have approved the state goods & services Act (SGST) for ensuring the roll out.
Here are five things you must know ahead of the big change in indirect taxation across the country
1) What exactly is GST?
GST is paid when a consumer buys something (even a company buying inputs). The tax is levied on every transaction in the supply of goods and services, barring certain exempted items such as petroleum products. The tax levied at one stage can be set off or deducted from the tax to be paid at the next stage.
India has a dual GST-Central GST (CGST) and State GST (SGST). There is also an integrated GST (IGST) on the inter-state supply of goods and services, which can be set off against CGST and SGST that is to be paid.
From July 1, 2017, India will move to a one-tax, one-nation regime. All goods and services will be taxed under one of four slabs-5%, 12%, 18% and 28%-wherever they are purchased.
2)Which items are covered under GST and which are not subject to GST?
Daily use consumer items such as cereals, pulses, dairy produce, fresh meat, fish, fresh vegetables and fruits are all exempt from GST, according to government data.
Education and skill development services have also been granted exemption, official data show.
Alcoholic drinks, electricity and five petroleum products (crude oil, petrol, diesel, natural gas and aviation turbine fuel) are out of the purview of GST. These will continue to attract VAT and central excise. The petroleum products have been excluded only temporarily.
3)Relaxation in rules for two months
The GST council has relaxed the tax filing norms for two months-July & August, 2017-for those still maintaining manual records or in the process of GST transition.
The council has finalised a simplified form instead of invoice-wise returns, according to this release by the Central Board of Excise & Customs, the government department overseeing the implementation of GST. There would be no late fees or penalties for late returns, and regular returns would need to be filed from September.