India’s ruling Bharatiya Janata Party has come to power with a majority in the Rajya Sabha.
The BJP has been in power since June last year and will soon be sworn in to office.
Here are the highlights from the day:What was on the agenda?
The government will address a major issue facing the country: the implementation of the Goods and Services Tax (GST) and the Goods And Services Tax, or GST, by September 15.
The first step towards implementation is for the government to issue a circular inviting private companies to submit proposals on the GST implementation.
The circular will be issued in September.
The government will also consider and approve all other suggestions from private companies.
The government is expected to introduce the new tax regime in the first half of next year.
The BJP’s manifesto says it will “bring a progressive, fair, inclusive and transparent tax regime to India”, which it says will bring benefits to consumers, businesses, the economy and the national interest.
What is the GST?
The GST is a tax on transactions between individuals and between businesses.
It will tax businesses with an annual income of more than Rs 1 lakh and the same amount over two years for each unit of sale.
The tax will be based on a fixed rate of 10%.
This is to ensure that all goods and services are taxed at a rate equal to the GST rate.
The new system is expected in the form of a single levy with an overall tax rate of 12%.
The GST rate will be calculated as the rate divided by the value of the item being taxed, which will be equal to 12% of the GST.
The total tax levied on goods will be 25%.
Goods valued at less than Rs 2,000 will not be taxed at the GST rates.
The system is to be rolled out over a period of three years, with a single-digit tax rate applied to goods valued at Rs 2.5 lakh and above.
What are the main differences between the existing tax system and the new system?
The existing tax systems were set up in 1986 and 1990 to give tax relief to the poorest and most vulnerable citizens.
The new system will tax goods and businesses based on their retail value, which is a much wider measure of value.
This means that it is expected that the tax rates will be different for different sectors.
For instance, a 10% GST will apply to goods sold at stores, while a 20% GST is likely to apply to non-retail goods, such as mobile phones.
The main differences include:The GST will be applied on goods and non-recyclable items such as cars, trucks and bikes, as well as the value-added tax (VAT).
The new tax system will also apply on products such as medicines, cosmetics and household goods.
What will the government do about companies and businesses who don’t want to comply with the new GST system?
A number of non-compliant companies and noncommercial businesses will have to pay GST on the goods that they import or sell.
This includes small and medium-sized businesses, private firms and noncorporate entities.
This will be done through a tax credit or rebate that will be available to the company or business.
This will help the company to pay taxes on the taxes it is already paying, as it will have no taxable income.
The GST on goods imported or sold in the country will be levied on the actual cost of the goods.
The GST will also be levied at the point of delivery, which may be a retailer, a service provider or a manufacturer.
The revenue collected from the sale of these goods will go to the government, which can spend the money on public goods.
Will this be implemented on a voluntary basis?
The new GST is expected by the government and the government has promised to work with all private companies on the implementation.
However, there is no clear mechanism to incentivise them to participate.
The Goods and Service Tax Council (GSC), a body of representatives of all private firms in the tax and services sector, has suggested that a new mechanism be put in place, which would require them to submit detailed information on the tax compliance of their businesses.
The GSC has also recommended that the GST should be levied only on non-taxable goods.
Who will be affected by the new rules?
The main beneficiaries of the new structure will be small and mid-sized companies, which currently pay only a small portion of their taxes.
For them, the tax burden will be lower, as they will be expected to pay more of their income to the state and federal governments, which could mean a reduction in their tax burden.
For larger companies, such firms could benefit from lower rates of VAT on their goods.
These firms would be expected by government to increase the tax-paying activities of their employees, thereby helping the government meet its revenue requirement.
Will the GST be available in all states?
The central government has been working on the new regime in states that have been voting for it, including Uttar Pradesh, Jammu and Kashmir