Shri Santosh Kumar Gangwar, Minister of State for Finance in written reply to a question in Rajya Sabha today said that Goods and Services Tax (GST) is much simpler to earlier tax regime.
“The tax rates on goods and services have been fixed taking into consideration, inter alia, the total indirect tax incidence in pre- GST regime, including cascading of taxes. The GST rates so notified are lower than the pre-GST tax incidence on most of the items of mass consumption, such as cereals, pulses, milk, tea, vegetable edible oils, sugar, toothpaste, hair oil, soap, footwear, Childrens’ picture, drawing or coloring books, etc. In addition, the objective of GST was to migrate from a complicated and multi tax system to a simpler tax system. The GST thus, is a much simpler tax regime as compared to tax regime it has replaced”, he said.
The new indirect tax law, GST had been implemented by the Government on 1st July 2017. Under the new law, all the indirect taxes such as excise duty, sales tax, VAT, service tax except customs duty were subsumed.
However, still there are certain confusions and ambiguities on the new law among the traders and consumers. The Government is taking all possible efforts to reduce the difficulties.
“In fact, GST has replaced several taxes which were being levied and collected by the Centre, including Central Excise Duty; Duties of Excise (Medicinal and Toilet Preparations); Additional Duties of Excise (Goods of Special Importance); Additional Duties of Excise (Textiles and Textile Products); Additional Duties of Customs (commonly known as CVD); Special Additional Duty of Customs (SAD); and Service Tax. In addition, a number of State taxes have also been subsumed in GST, including State VAT; Central Sales Tax; Purchase Tax; Luxury Tax; Entry Tax (All forms); Entertainment Tax (except those levied by the local bodies); Taxes on advertisements; Taxes on lotteries, betting and gambling. Besides, a number of cesses have also been abolished vide the Taxation Laws Amendment Act, 2017. GST has only five rational rates (0%, 5%, 12%, 18%, and 28%) as against multiple excise duty rates, rate of cesses and surcharges and multiple rates of VAT (varying across the states in many cases). Therefore, overall the GST is much simpler to earlier tax regime it has replaced”, he added.
