Get ready for GST! Draft bills have been approved by cabinet

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Get ready for GST! Draft bills have been approved by cabinet The Union Cabinet today has passed all four legislations to implement the Goods and Services Tax (GST). The bill would now be introduced in Parliament this week before it gets rolled out from July 1.
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Also read: GST to be rolled out by July 1. This is how it will be different from UK, Canada, other countries

Once these bills are approved by Parliament and a separate one is approved by all state assemblies, the legislative process for GST roll out will be completed. The one-nation-one-tax regime will merge central taxes like excise duty and service tax and state levies like VAT.

Four-tier tax slabs of 5, 12, 18 and 28% along with an additional cess on demerit goods like luxury cars, aerated drinks and tobacco products was passed last week by the parliament, while the process of putting various goods and services in different slabs will start from next month.

"The Union Cabinet chaired by Prime Minister Narendra Modi has approved the four GST related bills -- The Central Goods and Services Tax Bill 2017 (The CGST Bill), The Integrated Goods and Services Tax Bill 2017 (The IGST Bill), The Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill) and The Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill)," an official statement said.

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While the CGST Bill makes provisions for levy and collection of tax on intra-state supply of goods, services or both by the central government, the IGST Bill makes provisions for levy and collection of tax on their inter-state supplies.

Also read: E-commerce have to pay 1% tax at the source after GST

On the other hand, the UTGST Bill makes provisions for levy on collection of tax on intra-UT supply of goods and services in the Union Territories without legislature, and is similar to States Goods and Services Tax (SGST), to be levied and collected by the States/Union Territories on intra-state supply of goods or services or both. This has to be approved by each of the state assemblies.

The Compensation Bill provides for compensation to the states for loss of revenue arising on account of implementation of the GST for a period of five years from the roll out.

Also read: Glucose biscuits set to go lighter, all thanks to GST

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GST, the biggest tax reform since India got independence is expected to accelerate the rate of economic growth by at least 0.5 percentage points, while also broadening the revenue base and cutting compliance cost for firms.

(Image source: TomorrowMakers)