Jain (Deemed-to-be University)'s School of Humanities and Social Sciences Organized a Guest Lecture on GST Overview
As a part of Words of Wisdom series, Jain (Deemed-to-be University)'s School of Humanities and Social Sciences organized a guest lecture on 'GST Overview' on 16 September 2017 for MA Economics students. The guest speaker of the day was Mr. Naveen Rajpurohit, Partner - Indirect Tax, BDO India LLP.
The session began with a brief preface to the implementation of GST. In his talk, the speaker while explaining the evolution of GST mentioned that France was the first country to implement GST in 1954. There are more than 150 countries which have implemented GST or VAT. In few countries, VAT is alternative for GST which is a destination based tax levied on the consumption of goods and services.
Explaining its introduction in India the speaker said that, in India, GST was first conceptualized and given a go-ahead in 1999 during a meeting between the then Prime Minister Atal Bihari Vajpayee and his economic advisory panel which included three former RBI governors IG Patel, Bimal Jalan and C Rangarajan. In 2000, the Vajpayee government started a full-fledged discussion on GST by setting up an expert panel. In 2006, Congress government - Finance Minister P.Chidambaram in his budget speech set an ambitious 1 April 2010 as the deadline for GST implementation. Later Congress could not implement it due to the opposition from other political parties. Now, in 2017, during the BJP rule, it has finally been implemented throughout India.
He went on to explain that the Indian system of taxation of goods and services is characterized by cascading, distortionary tax on production of goods and services which leads to miss-allocation of resources, hampering productivity and slower economic growth.
He explained the amalgamation of the various indirect taxes into one tax. Other than the tax slabs, he also elucidated upon the breakup of GST into CGST, SGST, and IGST. This was explained elaborately with examples to substantiate it. He also stated that the GST council sets the exemption threshold for tax at Rs.20 lakhs while it was Rs.10 lakhs in the northeast. He also spoke about input tax credit and the composition scheme under the GST law.
Further, he stated that the GST is governed by GST council whose chairman is the Finance Minister of India. Under GST, goods and services are taxed at the following rates, 0%, 5%, 12%, 18% and 28%.
During the session, describing how ideal tax system functions he said that taxes are collected at various stages of production such as manufacturing, supply, wholesale, retail and finally at consumption based on the add-on value at each stage of the value chain.
Mr. Naveen Rajpurohit's session broke down what may seem like a complex topic into a more understandable and simple concept for the audience. It was followed by the interaction with the audience where their queries were addressed.