GST: One Nation One Tax One Market

What is Goods and Services Tax (GST)?

• One-nation, one-tax revolution ‘GST’ was implemented in India on 1st July 2017 through the insertion of the Constitution (122nd Amendment) Bill or 101 amendment act 2016. 
• It provided unified common national market for India, boosting foreign investment and “Make in India” campaign.
• It is categorized as an indirect tax levied on the supply of commodities and services.
• In layman’s language, GST is an indirect tax levied on goods and services supply.
• GST has replaced many indirect tax that existed earlier in India that included the following:
  • Excise Duty
  • Service Tax
  • Entertainment Tax
  • Additional Customs Duty
  • Surcharges
  • State Level VAT
  • Octroi Tax

Background of GST

• In 2000, Atal Bihari Vajpayee, the then prime minister of India under BJP lead Government, flags off discussions on the implementation of GST. A committee was set up under the then finance minister of West Bengal, Asim Dasgupta, to design the GST model and put in place the back-end technology and logistics for its implementation. 
• Later on, task force chaired by Vijay L. Kelkar, the then advisor to the finance ministry, says the existing tax system is in built with so many problems suggesting a comprehensive GST in 2004.
• Various steps were taken in this direction and union budget 2007-08 fixed April 1, 2010 as the deadline for implementation of the GST.
• In 2009 Pranab Mukherjee, announced the basic structure for GST with a deadline.
• In 2011, Congress party-led government introduced Constitution Amendment Bill in the Lok Sabha to implement GST and India’s opposition parties protest. The bill was sent to a parliamentary standing committee headed by the then finance minister Yashwant Sinha.
• Finally, after a lot of debates and steps, GST was rolled out from 1st July 2017 with the following GST Bills:
  • Central GST Bill, 2017
  • The Integrated GST Bill, 2017
  • Union Territory GST Bill, 2017
  • GST (Compensation to States) Bill, 2017

Components of GST

• CGST: It is collected by the Central Government.
• SGST: It is collected by the State Government.
• IGST: It is collected by the Central Government.

Tax Slab of GST  

• GST is currently levied in four slabs of 5%, 12%, 18% and 28%.
• Most of the articles that are used daily or are basic in nature have zero GST as per the latest revision of the tax rates.
• 5% of the articles are covered by 18% or lower GST slab.
• Under the previous, value-added tax (VAT) regime, standard taxation rate was much higher in comparison to GST.
• Only luxury and sin goods are taxed at highest 28% GST rate.
• GST rates are calculated based on Harmonized System of Classification Number assigned to the product and the corresponding tax rate.

GST Rates

5% GST Tax Slab Items	12% GST Tax Slab Items	18% GST Tax Slab Items	28% GST Tax Slab Items
Sugar	Ghee	Biscuits	Waffles and wafers coated with chocolate
Tea	Butter	Flavoured refined sugar	Sunscreen
Sliced Mango	Fruit juice	Movie tickets priced above ₹100	Dye
Ayurvedic Medicine	Almonds	Monitors and television screens	Hair clippers
Skimmed milk	Sugar boiled confectionery	Tyres	Ceramic tiles
ICDS Food Packages	20-litre packaged drinking water bottle	Power banks of lithium ion batteries, small sport related items, video games, carriage accessories for disabled	Wallpaper
Milk food for babies	Drip Irrigation System	Washing machine	Dishwasher
Edible oils	Biodiesel and select biopesticides	Vacuum cleaner	Automobiles Motorcycles
Khakra & Plain Chapati	Mechanical Sprayers	Cakes	Aircraft for personal use
Roasted coffee beans	Handbags including pouches and purses	Pastries	Pan masala
Packed paneer	Jewellery box	Preserved vegetables	Tobacoo
Frozen vegetables	Wooden frames for painting	Soups	Cigarette
Cashew nuts	Photographs	Suitcase	Bidis
Spices	mirrors etc	Vanity case	Cement
Unbranded Namkeen	Ornamental framed mirrors	Briefcase	Yachts
Pizza bread	Brass Kerosene Pressure Stove	Chocolates	Weighing machine ATM
Rusk	Art ware of iron	Ice cream	Vending machines
Sabudana	Hearing aid parts and accessories	Chewing Gum/Bubble Gum	Aerated water
Fish fillet	Bamboo wood building joinery	Pasta
Packaged food items	Packed coconut water	Instant food mixes
Fertilizers	Fertilizer-grade Phosphoric Acid	Corn flakes
Footwear upto ₹1,000	Preparations of vegetables	Curry paste
Apparels upto₹1,000	Fruits	Mayonnaise
Real Zari	Nuts	Salad dressings
Agarbatti	Pickle	Mixed condiments
Domestic LPG	Murabba	Mixed seasonings
Straw, basketware articles, esparto	Chutney	Branded garments
Velvet Fabric (No Input Tax Refund)	Jam	Footwear priced above ₹500
Tamarind Kernel Powder	Jelly	Headgear
Mehndi Paste	Namkeen	Soap
Scientific and technical instruments	Bhujia	Hair oil
Floor covering	Frozen meat products	Deodorants
Plastic Waste	Packaged dry fruits	Preparation for facial make-up
Satellites and payloads	Animal fat sausage	Shaving
Ethanol- Solid biofuel pellets	Non-AC restaurants	After-shave items
Handmade carpets and other handmade textile floor coverings	State-run lotteries	Shampoo
Hand-made braids and ornamental trimming in the piece	Exercise books	Washing Powder
Coir mats	Notebooks	Detergent
Rubber Waste	Work contracts	toothpaste
Matting	Apparel above ₹1000	toiletries
Insulin	Tooth powder	kajal pencil sticks
Paper Waste	Spoons	tissues
Medicines	Umbrella	computers
Stent	Cake servers	printed
Braille watches	Sewing machine	circuits
Braille typewriters	Ladles	printers
Cullet or Scrap of Glass	Forks	monitors
Braille paper	Tongs	camera
Hearing aids	Skimmers	speakers
Postage stamps	Fish knives	CCTV
Biomass Briquettes	Mobile	Electrical transformer
Revenue stamps	Manmade Yarn	Optical fiber
First day covers	Diagnostic kits & reagents	Bidi Patta
Special flights for pilgrims (Economy Class)	Nil Sewing Thread of manmade filaments	Mineral water
Stamp-post marks	Sewing Thread of Manmade Staple Fibres	Tissues
	Glasses for corrective spectacles and flint buttons	Poster Colours
	Special flights for pilgrims (Business Class)	Modelling Paste for Children
	Movie tickets priced below ₹100	Envelopes
	Playing cards	Some parts of pumps
	Ludo	Steel products
	Carom board	Plain Shaft Bearing
	Chess board	Stationery items like clips

List of items exempted from GST

• Eggs, Honey and Milk Products
• Oil Seeds, Fruit and Part of Plants
• Gums, Resins, Vegetable SAP & Extracts
• Sugar, Jaggery, Honey & bubble Gums
• Tea & Coffee Extract & Essence
• Water, Mineral & Aerated
• Flours, Meals & Pellets
• Salts & Sands
• Fossil Fuels – Coal and Petroleum
• Drugs & Pharmaceuticals
• Fruits and Dry Fruits

Goods & Services Tax Council

• It is constitutional body formed under article 279(a) for making recommendations to the Union and State Government on Goods and Service Tax (GST) issue.
• Members of GST council:
  • Chairperson: Union Finance Minister (Current FM – Nirmala Sitharaman)
  • Member: Union Minister of State, in-charge of Revenue, Min. of Finance             
  • Other Members: Minister In-charge of Finance or Taxation or any other Minister nominated by each State Government.

Under the GST regime, CBEC has been renamed as the Central Board of Indirect Taxes & Customs (CBIC) post legislative approval that supervise the work of all its field formations and directorates and assist the government in policy making in relation to GST, continuing central excise levy and customs functions.

 GST Data 2022

• Gross GST revenue collected for November 2022: 1,45,867 crores (increase of 11% Year-on Year)
• Monthly GST revenues was recorded more than 1.4 lakh crore for nine straight months in a row
• Revenues from import of goods was 20% higher and revenues from domestic transaction (including import of services) 8% higher than the same month last year.

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