Goods and Services Tax (GST) Act:
- Goods and Services Tax (GST) Act came into effect in 2017.
- Goods and Services Tax (GST) was introduced by the Government of India to boost the economic growth of India. GST is considered to be the biggest taxation reform in the history of the Indian economy.
- The power to make any changes in the GST law is in the hands of the GST Council. GST Council is headed by the finance minister. One hundred and first amendment act, 2016 introduced the GST in India in July 2017.
- Goods & Services Tax Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax.
- As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A.
- The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2016, for the introduction of Goods and Services Tax in the country was introduced in the Parliament and passed by Rajya Sabha on 3rd August 2016 and by Lok Sabha on 8th August 2016.
- GST Council is an apex member committee to modify, reconcile or procure any law or regulation based on the context of goods and services tax in India.
Matters on which GST Council makes recommendations:
- Taxes, cesses, and surcharges levied by the Centre, States and local bodies which may be subsumed in the GST;
- Goods and services which may be subjected to or exempted from GST;
- Model GST laws, principles of levy, apportionment of IGST and principles that govern the place of supply;
- Threshold limit of turnover below which goods and services may be exempted from GST
- Rates including floor rates with bands of GST
- Bank’s economists see CAD (Current Account Deficit)1 widening to 3.7% of GDP, peg2 trade deficit at 8.5% in 2022-23.
- As per the recent SBI research, High inflation3 is driving about 8% of the current surge in Goods and Services Tax revenues, and inflation adjusted GST collections so far this year are 26% higher than pre-COVID level.
- SBI Research also raised its current account deficit target for this year to 3.7% of GDP, projecting the trade deficit to widen to 8.5% of GDP in 2022-23.
- The bank’s researchers attributed the entire expansion in India’s trade deficit in July over June, to the dip in exports caused by government measures to control inflation, such as windfall taxes on petroleum products.
Economic vocabularies used:
- Current Account Deficit (CAD): It is the shortfall between the money received by selling products to other countries and the money spent to buy goods and services from other nations.
- Peg: Pegging is a way of controlling a country’s currency rate by tying it to another country’s currency.
- High inflation: Prices for goods and items are unusually high.
Curated by- Jeffrey
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