A goods and services tax is
a multilevel value added tax. It is a
value added tax that is levied on most of the goods and the services that are
sold for any domestic consumption. This tax is made to provide the profit for the federal government. The Goods
and Services Tax GST is paid by the consumers by this has levied and gets
remit to the government authority by the businesses. There are certain
essential goods like the medical services and prescriptions as well as the
grocery that are exempted from the goods and services Tax. The items which are
exempted are taxed 0 percent and are therefore called as the zero rated
supplies.
The businesses which
purchase the services and goods that are used or consumed or even supplied in
the course of the commercial activities of them may claim to input the tax
credits as the subject to prescribed requirements of the documentation. This
avoids the cascading that is the application of the GST on the same item or
service many times as it goes on from business to business until it reaches the
final consumer. However, this system is not fully effected as the
criminals who defraud the stem and then claim the Goods and Services Tax GST input credits for the sales that are not
existing by the unreal company.
The GST Bill seeks to change or update the constitution in order to
introduce the goods and service tax (GST) that will subsumes the various kinds
of central indirect taxes that include a central exercise duty and the
countervailing duty as well as the service tax. The State value is also
subsumed adding the tax (VAT) the octroi as well as the entry tax and luxury
taxes.
This bill adds a new Article
in the constitution of the countries making the legislation on tax on the items
and the services that is the concurrent power of the centre and all states. It
seeks to change the restriction on the states on taxing the purchase items to
the services supplied or the good supply. It seeks to make a GST council that
shall be tasked with the optimizing collection of the taxes on the items as
well as the services. This council must
consist of the Finance minister and the union minister of the state whoever is
in charge of the Finance or revenue. This council will be a body basically that
will decide the taxes that are levied by the states and local bodies that will
go to the GST and this will be on the basis of the GST Bill that will be applied.
