GST, an
abbreviation of the words Goods and Services Tax, is proposed to be introduced
in the Indian sub-continent, replacing the Value Added Tax Regime (VAT regime)
currenenly opertive since April, 2005. The vision on GST could not go ahead
since last 13 years, as there was lack of consensus amongst most of the Indian
States on the apprehension that the States’ fiscal auonomy of the States would
be seized by the Government India (Central Govt.) to make them cipher. Floods
of dialogues yielded, a consesus barring a few States and the foundation of
such new project was built up with the 122nd amendment of the
Constitution of India (Constitution). The Central Govt, in the meantime,
drafted out the Model GST Law on the
procedural and administrative aspects, but the legal and technical aspects,
pertaining to the liability, levy of tax and other allied matters, are yet to
be sorted out by the GST Council, set-up by the Central Govt. with the Minister
of Finance, as its Chairman and the State Finance Ministers and others, as the
members. The Council is now on the heels on a war footing devoted exercise to
give its birth to the GST Act on 01.04.2017. The Council has already finalized
the taxable quantum to accrue tax liability in respect of the North Eastern
States at Rs. 10 lakhs in place of Rs. 6 lakhs, as at present and Rs. 20 lakhs
in respect of other States. The rates of tax and other ancillary matters are
still under examination. The marathan trainings to the law operating
machineries are being imparted, batch by batch, in full swing,
GST, in fact, is prospective measure to levy a single
consolidated tax on the sales of the goods and the services. It is designed as
an admixure of the Central and States laws.
The central laws are (i) the Cenrtal Excise Duty Act, (ii) Additional
Central Excise Duty Act (iii)Excise Duty levied under the Medicinal and
Toiletries Preparation Act (iv) Service Tax Act, (v) Additional Customs Duty,
commonly known as the Countervailing Duty- levied under the Customs Act, (vi)
Special Additional Duty of Customs under the Customs Act, 1962,(vii) Surcharge
and (viii) Cess, while the State laws are
(i) The Value Added Tax Act (VAT
Act), (ii) The Sales Tax Act, (iii) Amusement and Entertainment tax Act, (iv)
Luxuries Tax Act, (iv) The tax on lotteries and betting. (v) Surcharge (vi)
Cess and (vii) Entry Tax. The law on sales tax will include as well as Central
Sales Tax Act, 1956 (Central Act).
GST law will be simple and uniform
measure of tax to provide relief to the industrialists, traders and consumers
from multiplicity taxes. Unlike the VAT Act, the consumers will get the benefit
of deduction of tax paid on previous purchases made making way of
arresting price rise to a great extent.
The commodities like, crude oil, petrol oil, diesel oil with other petroleum
products and liquor will be excluded in the GST net-work and the taxability of
these goods will be governed by a separate road map with an independant
tax-net, as was existent prior to 01.07.1993. In such a case, in order to govern the inter-State
sales and stock transer of such goods, the continuance of the Central Act may
be imperative..
The proposed GST regime will have three tier system, that is, three
administrative laws will be there. (1) SGST
Act (State Goods and Services Tax Act)-to levy tax under the State Goods
and Services Tax Act), (ii), CGST Act
(Central Goods and Services Tax Act)- to levy tax under the Central
Goods and Services Tax Act), (iii) IGST (Integrated Goods and Services Tax Act)
to levy tax under the Integrated Goods and Services Tax Act (Inter-State Sales), The IGST and CGST Act
will be enacted by Parliament, while SGST Act by the State Legislatures.
The taxing authoritiies under the IGST
& CGST Acts will be appointed by the Board ( the Central Board of Excise
and Customs, constituted under the Central Board of Revenue Act,1963)while the
State Govt. will appoint the SGST
officials.
The prolonged system of the goods, declared to be of special importance
in the course of inter-State trade or commerce, providing the tax benefits and other facilites, will be
dismantled to make equal stature in the tax scenario. The consolidated rate of
tax will be uniform and within the range of 20 to 22 paise in a rupee. The
consolidated rate of tax may be much lower, which is now in and around of 30 paise.
The present mode of stock transfer of goods to other States with tax free
movement will attract tax-net, but the formulation is to be waited. The bogus
deals of prevelant stock transfer of tea, coal, bamboo, superi etc. in Assam
may require to bid a good bye. The GST is a methodical and chain system of
deals, but the chrnonic long continued practice of avoidance or evasion of
taxes with the nexus at different levels can not be ruled out. The functioning
of the Vigilance Wing and Check Post machinery will, therefore, have a dire
necessity for succssful implementation of the projects.
Assam is mainly a consuming
State. The recurring cost in course of movement of goods viz. transporting
cost, labour cost, gratification at different angles, abnormal profit, tax
elements may yield heavy price hike. The quantum of tax, collected will be
lesser, as the earlier taxes paid will be admissible for credit or
reimbursement. In 2015-16, the total collection of tax under the State taxation
department was Rs.8614.00 in which Rs. 7641.00 includes VAT & CST, while Rs. 567.00 is Entry
tax. VAT and CST amount of Rs.7641.00
includes about 33% of Crude Oil and Petroleum etc. tax, that is, Rs. 2521.00.
The other tax on sales stands
Rs.5120.00. While addiing Rs. 567.00 (Entry tax), Rs.19.00 (Amusement
tax) and Rs. 10.00 (Luxury tax), it will come to s 5716.00. This was the
collection of tax revenue in 2015-16 of the respective Acts proposed to be
transferred to GST. If the collection of tax on the proposed GST measure go up,
this is well and good; otherwise, the State will have to remain at the mercy of
the Central Govt. for compensation, as assured. In fact, this may be a far cry.
GST will, no doubt, bring a
drastic economic evolution, It is a simple, uniform and is anticipated to be transparent. However, if
the economy of the poor State like Assam gets any set back, the hope and
asipiration of the people of Assam will be frustrated and it may turn to a catastrophe.
We are to wait and see.
(Mrinal Kanti Chakrabartty)
R.G.Barua Road, Lakhipath,
Guwahati-781-024
