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GST bills passed: An explainer about what the new tax reforms mean
The government is very optimistic about economic growth by 1 to 2 per centage affter the GST is rolled. What does it mean? Read the explainer here.
On
Wednesday
the
Lok
Sabha
cleared
all
the
four
bills
for
the
launch
of
the
Goods
and
Services
Tax.
It
is
the
country's
biggest
tax
reform
since
1947.
The
aim
of
the
GST
is
to
unify
India
into
a
common
market
and
eliminate
several
central
and
state
levies.
What
do
these
tax
reforms
mean?
The
government
says
that
the
new
indirect
tax
will
increase
government
revenue
and
boost
economic
growth
by
1
to
2
per
centage
points.
Here is an explainer:
- There will be no tax on essential items like rice and wheat
- Two standard rates of 12 and 18 per cent will cover most of the manufactured items and services.
- New regime will had four slabs of 1, 12, 18 and 28 per cents
- The lowest tax rate of 5 per cent will be for items such as spices, tea and edible oil while the highest at 28 per cent will be imposed on luxury cars, tobacco, aerated drinks and pan masala.
- The centre and the state would both asses taxpayers with annual turnover of above Rs 1.5 crore. In Northeastern states, those businesses with annual turnover of Rs 10 lakh and below will be exempt from GST. In other states the limit is at Rs 20 lakh.
- States will now have the power to assess taxpayers with turnover of below Rs 1.5 crore.
- Compensation bill will ensure states are compensated for the first five years due to revenue loss after the GST rollout. This money would given from a fund created by the centre.
OneIndia News
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Story first published: Thursday, March 30, 2017, 7:35 [IST]