The Parliament yesterday passed the GST Constitutional Bill, which would pave the way for, some say, the most radical tax reform since Independence.
Starting April 1 next year, the government will eliminate most state- and central-level taxes and levies and replace them with a single goods and services tax.
The benefits: it will boost compliance by subsuming the country’s cumbersome tax structure, promote inter-state trade by doing away with differential tax rates and unify India as one national marketplace.
The GST will follow primarily a dual tax struture: some transactions will attract central GST while others will be levied state GST. There’s a third tax, integrated GST, on inter-state transactions.
The following table outlines the indirect taxes that will be subsumed when GST comes into effect.