Lok Sabha has passed a bill called the Goods and Services Tax Bill (GST) amid huge uproar. The opposition, Congress was not happy with the bill and they staged a walk out from the house. The bill has been passed and is reportedly set to be sent to a Parliamentary committee for review by the Rajya Sabha.

According to PTI, Finance Minister Arun Jaitley in the house argued strongly for the bill saying it will make India a single market. However, opposition demanded a review of changes made in the bill to which Jaitley reacted with "GST is not a dancing instrument that it will jump from standing committee to standing committee."

Image Source: Reuters

Understanding GST

1. It is a tax levied when a consumer buys goods or services. This is how what consumption is taxed in most developed countries. The bill provides for 1 percentage point extra tax on goods for at least two years.

2. The bill introduces a new article that says Parliament, and, subject to some conditions, the legislature of every state will have power to make laws with respect to goods and services tax imposed by the Union or the state.

3. There are fears that states may lose some revenue because of the introduction of GST. The bill allows for compensation for revenue loss to states for a period of 5 years.

4. The government says that GST will be levied on buyers of goods and services, or where the service is consumed. This means that big consumer states, such as, Uttar Pradesh, West Bengal and Kerala will get a high share of the taxes. Manufacturing states like Tamil Nadu, Gujarat, and Maharashtra fear that they may lose out on revenues.

Feature Image Source: Vinodkumartiwari