Goods and Services Tax (GST)
- What is it?: It is a destination-based taxation system.
- Formations: Established by the 101st Constitutional Amendment Act.
- Motto: “One Nation One Tax”
- Aim: To make India a unified market.
- Features
- It is a single tax on the supply of Goods and Services in its entire product cycle or life cycle from manufacturer to the consumer.
- It is calculated only in the “Value addition” at any stage of goods or services.
- The final consumer will pay only his part of the tax and not the entire supply chain which was the case earlier.
- There is a provision of the GST Council to decide upon any matter related to GST whose chairman is the finance minister of India.
GST Council
- Constitutional Backing: It was set up by the President as per Article 279A (1) of the amended Constitution.
- Members:
- The members of the Council include the Union Finance Minister (chairperson), the Union Minister of State (Finance) from the Centre.
- Each state can nominate a minister in-charge of finance or taxation or any other minister as a member.
- Functions
- The Council, according to Article 279, is meant to “make recommendations to the Union and the states on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws”.
- It also decides on various rate slabs of GST.
- For instance, an interim report by a panel of ministers has suggested imposing 28 % GST on casinos, online gaming and horse racing.