CA Shankar Rochlani
H’ble Finance Minister Shri Arun Jaitley (FM) in his Budget Speech exhibited his commitment to introduce GST from 1st April 2016 by mentioning about Goods and Service Tax (GST) multiple times in his Budget Speech 2015.
Following are few of the key aspects mentioned about GST the Budget Speech:
- GST will put in place a state of- the-art indirect tax system by 1st April, 2016
- We need to revive growth and investment… We need an enabling tax policy for this. I have already introduced the Bill to amend the Constitution of India for Goods and Services Tax (GST) in the last Session of this august House.
- GST is expected to play a transformative role in the way our economy functions.
- As part of the movement towards GST, I propose to subsume the Education Cess and the Secondary and Higher Education Cess in Central Excise duty.
- Introduction of GST is eagerly awaited by Trade and Industry
- To facilitate a smooth transition to levy of tax on services by both the Centre and the States, it is proposed to increase the present rate of service tax plus education cesses from 12.36% to a consolidated rate of 14%.
- Secured the political agreement on the goods and services tax (GST), that will allow legislative passage of the constitutional amendment bill
- We are now embarked on two more game changing reforms. GST and what the Economic Survey has called the JAM Trinit–Jan Dhan, Aadhar and Mobile
The Economic Survey 2014-15 (ES), which was released just a day before the Budget, also discussed about GST at length.
Thus, it can be observed that various steps are proposed to uplift the current indirect tax regime in line with proposed GST regime as under:
i. Rate of service tax was increased to 14% (with 2% of Swachh Bharat cess it may go up to 16%)
ii. Subsumed Education cesses with Excise and Service Tax
iii. Pruning of exemptions and Negative List
iv. Simplification of registrations, CENVAT credit related procedures
v. Permission to maintain records in digital format
Looking at these steps, in a way FM, through his Budget, is asking the industry and trade to gear-up for the next biggest tax reform in the India history since independence i.e. GST
Now, with the target date of 1st April 2016, the 13 months available for introduction of GST could be a tough target to be achieve, but achieving tough targets is what the new Prime Minister is known for. So, let’s hope for Acche Din Aane wale hai from 1st April 2016.
