‘A dual GST is the best solution for a country like India and, in any case, it is a myth that it will deliver lower revenues than a unified GST’ Though the government hasn’t made any official announcement as yet, there seems to be a general acceptance that a dual Goods and Service Tax (GST) is better than a … Currently tax is being imposed on inter state supply by the central government and simultaneously by state and central government on intrastate supplies. would be uniform across these statutes as far as practicable. The Model of GST laws is generally governs by the politico-economic arrangement of the country in subject. As a result, business owners had to deal with a variety of complicated state and federal taxes for each sale. It is levied at each stage of point of sale. Another big change under GST is the input tax credit (ITC) which was created to remove the issue of cascading taxes. The zero rate tax is applied on 50% of the items of the consumer price index (CPI) basket - an index that constantly measures prices of commonly purchased consumer goods and services to measure inflation. Today, the GST rate is 19.6 per cent. Structure of GST in India and its Governing Laws GST shall be dual levy in India with both Centre and State government levying respective GST parallelly on all intra state supplies. This dual GST model has been accepted by centre. This means GST is administered by the central government and the states. Hence, every transaction of supply of goods or services shall suffer Central GST (CGST) and State GST (SGST), when the transaction is within the State. The Concurrent Dual GST will enable State and Centre to charge a similar transaction at the same point of time fro the same even, it will have two components: one levied by the Centre (hereinafter referred to as Central GST), and the other levied by the States (hereinafter referred to as State GST). D) 5. India, like most other countries, follows the dual structure allowing both the Centre and the state to divide tax from sale of a product or good. tax called Goods and Services Tax (GST). D) Destination. India has chosen the Canadian model of dual GST. 3. Dual GST not an ideal model: It can only be a transitional model as tax would be levied at two levels and compliance costs may not lessen significantly. Items that are eligible for zero rate tax are decided by the government. However, the basic features of law such as chargeability, definition of taxable event and taxable person, measure of levy including valuation provisions, basis of classification etc. A) 6. The States already have the power to levy the tax on the sale and purchase of goods (and also on immovable property), and the Centre for taxation of services. The four-tier tax structure contains four separate rates: a zero rate, a lower rate, a standard rate, and a higher rate. This was the prime basis on which all the indirect taxes were subsumed under one tax i.e. That is ₹720. The Model of GST laws is generally governs by the politico-economic arrangement of the country in subject. One imposed by the Central Government; The other levied by the State Government. India has adopted and implemented the dual GST model from 1 July 2017. This model is designed to enable State to levy taxes on all goods and Centre is entitled to collect tax on all services. In order to uphold the interests of Center and State, a dual model like that of Canada is required. For intrastate sales, the ITC is administered separately by your state government and the central government. Under this model GST have two components viz. Structure of GST: The destination based tax has adopted the dual model in which both States and Central levies tax on Goods or Services or both. Under the Constitution, presently the taxing powers are presently split between the State and the Centre. 2. No special effort would be needed for levying a unified Centre tax on interstate services. Relevant Important definitions 21st September, 2016 4 A. R. Krishnan . The government is keen to pass the GST bill … Australia is most recent example of a National GST, which is levied and collected by the centre, but the proceeds of which are allocated entirely to the States. GST is _____ a) applicable to the state of J&K b) not applicable to the state of J&K c) going to be applicable to the state of J&K from later date d) both (b) and (c) above 27. The goods and services tax law has been billed as “one nation, one tax.” Because of the way India’s government is set up, GST is not actually a single tax and, in some cases, it’s multiple taxes that add up to a single overall rate. When you have a credit from IGST, it applies to your IGST bill first. However, in keeping with the federal nature of India, the government and the GST council decided to adopt the Dual GST model, which has been successfully implemented in Canada. Overall, the dual GST regime streamlines the way state and central governments administer taxes. Read to know more about the features and benefits of dual GST structure in India. GST applies to whole of India … Under this model GST have two components viz. Non-Concurrent Dual GST: Under this model, GST on goods can be levied by the States only and on services by the Centre only. A “Dual GST” model has been adopted in view of the federal structure of our country. However, the basic features of law such as chargeability, definition of taxable event and taxable person, measure of levy including valuation provisions, basis of classification etc. Unitary nature of company does not require to adopt a dual nature of GST, where as a strong federal country need to adopt Dual model of GST. Non-Concurrent Dual GST: Under this model, GST on goods can be levied by the States only and on services by the Centre only. The collection of the tax is consumed either by State (or UT) and Central Government or solely by Central Government. A project launched for the computerisation of commercial taxes. It is levied at each stage of point of sale. The GST regime replaces those confusing taxes with a single, nationwide tax rate. States GST-(SGST) 3. In our previous post (click here to see that), we had given an introduction to GST, where we talked about the basic structure of GST and the need for introducing this change in the law. A dual GST module for the country has been proposed by the EC. You can change your cookie choices and withdraw your consent in your settings at any time. C) 3. Because of India’s federal structure, dual GST model had been adopted. Consistent with the federal structure of the country, the GST will have two components: one levied by the Centre (hereinafter referred to as Central GST), and the other levied by the States (hereinafter referred to as State GST). GST stands for goods and service tax which is applicable in India since 1st July 2017, so July 1st is declared as ‘GST … Answer: B. Kelkar Committee suggested this model as an ideal model for Indian Indirect tax reform. The GST regime replaces those confusing taxes with a single, nationwide tax rate. A dual GST will, therefore, be in keeping with the Constitutional requirement of fiscal federalism. A comprehensive dual Goods and Services Tax (GST) has replaced the complex multiple indirect tax structure from 1 July 2017.It is the biggest tax reform ever happened in India. SGST and CGST are each charged at half of the total GST rate. “GST, to be implemented possibly, may address this issue of cascading and dual taxation impact,” it said. If you’re selling a ₹6,000 mobile phone to a customer in another state, you’d simply charge a 12% IGST. one tax called the Goods and Services Tax (GST). India has adopted and implemented the dual GST model from 1 July 2017. Need for a Dual-GST Model • The need for a Dual-GST model is based on the following premise: • At existing framework, both levels of Government i.e. Each financial situation is different, the advice provided is intended to be general. Switzerland, Austria), or dual GST structure wherein both Centre and States administer tax independently (Canada) or with some co-ordination between the national and sub-national entities (Brazil, Russia). Centre and States will simultaneously levy GST on every supply of goods or services or both which, takes place within a State or Union Territory. Only a handful of countries, such as India, Canada and Brazil, have a dual GST structure. 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