The New Delhi
Union Budget 2018 is very important because after the implementation of Goods and Services Tax (GST) this will be the first budget of the central government. Naturally, the changes made by the new tax system will also be seen on this time budget. It will be interesting to see how Finance Minister Arun Jaitley will present the tax structure’s decontrol in his budget speech.
Right now, the rule of
central budget is divided into two parts- Part A and Part B. The first part i.e. Part A refers to the amount allocated for different areas and the announcement of new plans by the government. In this part, the government’s priorities and important points are mentioned. At the same time, Part B refers to both direct and indirect tax proposals (Taxation Proposals). Direct taxes include direct taxes, income tax, corporate tax etc. whereas indirect taxes, which include service tax, excise duty, value added tax (VAT), octroi etc. prior to GST.
What will change with GST?
After 1 July 2017, more than a dozen indirect taxes have been included in the commodity and service tax (GST). Just customs duty is out of the purview of GST. Therefore, finance minister Arun Jaitley will have to look after the insub, because it is going to be forward.
Why is this important?
In the previous year’s budget, Direct and Indirect Taxes had almost equal share. This year’s budget will mean that the finance minister Jaitley will not be able to announce a gift or relief on the front, leaving the scope for huge fluctuations in indirect texches.
In the last year’s budget estimate, service tax was 14.2 percent in total indirect taxes. Then the revenue received from customs duty was also estimated to be derived from the service tax. Actually, service tax has increased to 239 times in the last 20 years. As mentioned above, service tax has also been included in GST. Most of the services have been classified as 12 and 18 percent tax, whereas before GST, all services were of uniform 15 percent tax.
However, indirect taxes include several cesses, including some cesses like education and agriculture, which were formerly considered super taxis. These super tax were levied on other taxes as tax. But, now all the cesses except cess on petroleum products have been absorbed in the commodity and service tax.
Source by:- indiatimesShare: