With a strong pitch for “one nation one tax”, the Hon’ble Finance Minister, Shri. Arun Jaitley presented, today, in the Lok Sabha, the Con...
With a strong pitch for “one nation one tax”, the Hon’ble Finance Minister, Shri. Arun Jaitley presented, today, in the Lok Sabha, the Constitution (122ndAmendment) Bill, 2014 on GST (“122nd CAB” or “GST Bill”), which was passed by the Rajya Sabha on August 3, 2016 with certain key amendments, that enables the GST in the country.
The Lok Sabha has unanimously passed the GST Bill with all 443 members present in the Lower House of the Parliament voting in favour of the Bill, ratifying last week's nod by Rajya Sabha members. However, AIADMK leader P. Venugopal staged a walk-out unhappy with the clarifications presented by Finance Minister, Shri. Arun Jaitley on the GST Bill.
“GST can't be seen as a victory of a party or government, it is victory for democratic ethos of India and a victory for everyone,” Hon’ble Prime Minister, Shri. Narendra Modi said. The Prime Minister promised freedom from tax terrorism to Indian corporations once the GST is implemented. He used some catchy one-liners, assuring everyone that the reform will see to it that "Consumer is the King" and GST meant "Great step towards transformation and transparency".
The long-delayed GST Bill was passed unanimously in the Rajya Sabha on August 3, 2016, with the Government successfully stitching together a political consensus on the GST Bill, to pave the way for much-awaited roll out of the landmark tax reform that will create a common market of 1.25 billion people. GST, is the biggest indirect tax reform since independence, is aimed at dismantling Inter-State barriers to trade in goods and services by subsuming a slew of around 17 indirect taxes viz. Excise Duty, Service Tax, VAT, CST, Luxury tax, Entertainment Tax, Entry Tax, Octroi, etc.
The GST Bill after getting introduced in Lok Sabha on December 19, 2014, was approved by the Lok Sabha in May last year (May 6, 2015) and referred to a Select Committee of Rajya Sabha which had submitted its Report on 122nd CAB on July 22, 2015. The GST Bill was introduced in Rajya Sabha in May last year where it has been pending because of consensus to be emerged between ruling and opposition party over certain provisions viz. Dropping of 1% additional tax on Inter-State sale of goods, Capping of GST rate in 122nd CAB, Forming of dispute resolution authority.
The key to forging consensus was the amendments the National Democratic Alliance (NDA) effected in the GST Bill, a copy of which was circulated among Rajya Sabha members on August 2, 2016, which importantly includes, dropping of 1% additional tax on Inter-State Sale of goods and a definite provision in the statute for 100% compensating the States for any revenue loss for 5 years, amongst others.
Since there were key amendments in the original draft of the GST Bill that was passed in the Lok Sabha last year, the GST Bill was, once again, sent back to the Lok Sabha, which has finally been passed today.
Steps forward to make GST a reality by April 2017:
· After passage of the GST Bill, as was amended by the Rajya Sabha last week, by the Lok Sabha today, the GST Bill will be sent to the States as 122nd CAB also have to be ratified by at least 50% of the States before being presented to the Hon’ble President of India for his assent. Several States will have to call for special sessions to clear GST in the next 30 days.
· GST Bill would be sent for President’s assent.
· Subsequently, a GST Council will be set up within 60 days of the enactment of the GST Bill, comprising the Union Finance Minister, MOS – Revenue/Finance and State Finance Ministers, which will make important recommendations on GST rates, Exempted goods and services, dual control & adjudication, etc.
· Thereafter, two legislations—Central GST (CGST) and Integrated GST (IGST) will have to be passed by Parliament and a State GST (SGST) legislation by each of the State Legislatures.
Passage of the 122nd CAB in the Parliament is being seen as a big victory for the Narendra Modi government. The next big challenge for the Narendra Modi government is to get the States on board and get rest of the process going as quickly as possible to meet the deadline of implementation of GST by April 2017.
These steps would require a lot of time, patience and constant deliberations both at the State and Central Government level along with substantial engagement with the industry bodies, traders, service providers and almost every local trade bodies and associations.
"The GST roll-out deadline of April 1, 2017, is certainly stiff. But it's still better to have a deadline”
Shri. Arun Jaitley, Finance Minister
Video presentation on key aspects of Model GST Law:
Watch the videopresentation on Draft GST Law - Levy, Taxable Event: Supply, Taxable Person, Composition Scheme at https://www.youtube.com/watch?v=XrWHZMZf8GQ to enrich knowledge regarding the key takeaways of the Model GST Law and the areas to be worked upon under the Model GST Laws – CGST, SGST and IGST.
To view our earlier newsletter on the amendments in GST Bill, please click on the link below:
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