GST in House, biggest tax reform gets rolling

With time running out in the winter session of Parliament, the government moved swiftly to introduce the Goods and Services Tax (GST) Constitution Amendment Bill on Friday. The Centre allayed states’ concerns over the treatment of petroleum products under the new tax regime and compensation for any revenue loss.

Aimed at creating a common market for the entire country,GST is proposed to subsume a number of central taxes — central excise duties, additional excise duties, service tax, additional customs duty and special additional customs duty —and state taxes — value-added tax, sales tax, central sales tax, entertainment tax, octroi, entry tax and luxury tax — according to the Bill tabled by Finance Minister Arun Jaitley in the Lok Sabha Stock Market Trading Tips

The Bill seeks  to make the GST rate uniform across the country. However, to give some fiscal autonomy to the states and the Centre,  there will be a provision of a narrow tax band over and above the floor rates. Earlier, a sub-panel of the empowered committee of states had recommended state GST at 13.99 per cent and central GST at 12.77 per cent. But, the rates will be decided later.

After GST is rolled out, both the Centre and states will simultaneously levy GST across the value chain. The Centre would levy and collect central GST and states would levy and collect state GST on all transactions within a state. Except for alcohol, all goods and services would come under GST, though some of these may be exempted from  tax.

The Centre would also levy and collect integrated GST (IGST) on all inter-state supply of goods and services. Proceeds of IGST will be apportioned among the states.

GST is a destination-based tax. All state GST on the final product will ordinarily accrue to the consuming state Personal Numerology Trading Tips

A new Article 246A is proposed to be included in the Constitution to confer simultaneous power to the Union and state legislatures to legislate on GST.

This was required since the Centre and states would have to bring in their own GST Bills in Parliament and the respective Assemblies, after the Constitutional Amendment Bill would becomes a law. The government expects GST to be rolled out from 2016-17.

The government, until Thursday evening, had said the Bill would be introduced on Monday. The Bill wasn’t discussed in the House’s business advisory committee and Lok Sabha MPs discovered the introduction of the Bill when its copies were circulated among them on Friday Commodity Trading Tips

Some states such as Tamil Nadu opposed the Bill, while West Bengal criticised the manner in which it was sought to be presented. Their MPs, along with those of some Left parties, spoke against the Bill or the manner in which it was tabled in the Lok Sabha.

Jaitley reached out to the Opposition by giving credit for GST to former West Bengal  finance minister Asim Dasgupta and the United Progressive Alliance (UPA) government for the progress made on the Bill. "The UPA Budget of 2006 spoke about GST, an idea originally conceived by the Atal Bihari Vajpayee government, for seamless transfer of goods and services across India," the finance minister said. He said the states were not divided politically on the issue.

Addressing a press conference later, Jaitley clarified the Bill need not go to the standing committee as it was already cleared by the committee of the previous Lok Sabha. The Bill was tabled in the Lok Sabha in 2011, when Pranab  Mukherjee was finance minister. After that, the standing committee had given its recommendations Nifty Trading Tips

The Bill has included petroleum products in the ambit of GST. However, it will be at zero rate. The industrial and transport fuels would be taxed at the GST rate at a date decided by the GST council, comprising the Union and state finance ministers.

Till the time the GST council does not arrive at the date, the Centre will continue to impose excise and states will impose VAT on petroleum products.

As part of easing the transition to the GST regime, the states would be allowed to levy an additional 1 per cent on supply of goods in the course of inter-state trade for a period of two years, over and above the IGST. The Bill has proposed to subsume Central Sales Tax, which is a tax on inter-state  movement of goods in the present regime, into GST Jackpot Trading Tips