- India introduced GST from July 1,2017 after making amendment in the constitution.
- GST replaced about 17 different indirect taxes which were imposed by the central and state government in India.
Some important enforcement areas of GST in India:
1. Respective rates of central and state indirect taxes were determined by the centre and state with different considerations.
- Since one single GST was applied on the entire country, it became necessary for the government to set up a nodal agency to determine GST rates and regulate the GST procedures.
- This nodal agency came in the form of GST council. The finance minister of India was made its chairperson whereas the finance ministers of states were made its members. The council meets every three month.
2. Rates of GST:
There are five different rates of GST applied on various types of goods and services. They are:
1. Zero GST:
The government does not charge GST.on certain goods and services and hence they fall under the zero (0%) GST rate.
Example:
Certain agricultural goods like vegetables, fruits, cereals, education and health services.
2. Levels of rates:
The goods and services not exempted from GST attract 5%, 12%, 18% or 28% depending on the type of needs which they satisfy. The highest GST rate of 28% is imposed mostly on entertainment and luxury goods and services.
3. Compensation to states:
With the introduction of GST it was calculated that some states may incur loss in revenue. Hende the government decided to provide compensation to such states for 5 years since the introduction of GST.
4. Goods and Services kept outside the realm of GST:
In the initial phase, government has not levied GST on certain goods and services. These are to be taxed according to the earlier rates of various indirect taxes. Gradually these goods may be brought under the purview of GST.
These goods are:
(a) Alcohol and
(b) Petroleum products (petrol, diesel, crude, Aviation Turbine Fuel (ATF) and natural gas)
