West Bengal Finance Minister Amit Mitra is named the new chairman of the Empowered Committee of State Finance Ministers on Goods and Services Tax (GST). He will succeed Kerala Finance Minister K M Mani who had to resign in November over corruption charges.

               The indirect tax system in India is complicated with overlapping taxes levied by the Centre and the State separated.                     

                 The Good and Services Tax is the indirect tax reform that will be levied on manufacture sale and consumption of goods and services.GST is a value added tax, where the person paying tax on his output is also entitled to input tax credit on the tax paid on its input. It would apply to both goods and services in a comprehensive manner with exemptions restricted to a minimum. Taxes such as excise duty, service, central sales tax, VAT ( value added tax), entry tax or octroi will all be subsumed by the GST under a single umbrella. The GST will have a ‘dual’ structure, which means it will have two components- the Central GST and the State GST. They will both have separate powers to legislate and administer their respective taxes.

In keeping with the federal structure of India, it is proposed that GST be levied concurrently by the Centre (CGST) and the States (SGST). It is expected that the base and other essential design features would be common between CGST and SGST, across SGSTs for the individual States. Both CGST and SGST would be levied on the basis of the destination principle. Thus, exports would be zero-rated, and imports would attract the tax in the same manner as domestic goods and services. Inter-State supplies within India would attract an Integrated GST (aggregate of CGST and the SGST of the destination State). TheGST bill was passed (the Constitution (122nd) Amendment Bill) in the Lok Sabha on 6th May, 2015.

BENEFITS

• The GST bill will lead to the economic integration of India by developing a common Indian market and will broaden the tax base.
• It will transform India into a uniform market by breaking the current fiscal barrier between states.
• the GST will facilitate a uniform tax levied on goods and services across the country.
• The GST will lead to rationalization of tax structure and simplification of compliance procedures

                               Indirect taxes are the charges that are levied on goods and services. Indirect Taxes are not levied on individuals, but on goods and services. Customers indirectly pay this tax in the form of higher prices. Indirect tax has the effect to raising the price of the products on which they are imposed.  of the significant indirect taxes include Value Added Tax, Central Sales Tax, Central Excise Duty, Customs Duty, stamp duties and expenditure tax.                                         

                           Value Added Tax is a multi-stage tax levied at each stage of the value addition chain, with a provision to allow input tax credit (ITC) on tax paid at an earlier stage, which can be appropriated against the VAT liability on subsequent sale. VAT is intended to tax every stage of sale where some value is added to raw materials, but taxpayers will receive credit for tax already paid on procurement stages. Thus, VAT will be without the problem of double taxation as prevalent in the earlier Sales tax laws.