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Landmark day for the Indian Economy as the GST Bill receives President’s Assent

With the Goods and Service Bill, 2014 receiving the Presidential Assent, the Government’s plan to standardize all indirect taxes Pan-India has finally been formalized. The Bill bringing with it an amendment to the Constitution as well, seeks to reform the tax structure in the country by aggregating the Government revenue through taxes under one head.

The landmark reform is the undoubtedly the biggest indirect tax reform since independence which seeks to bridge the barriers for inter-state trade in goods and services, by merging a approximately 17 different tax heads and putting them under a common title including, Excise duty, Service Tax, VAT, CST, Luxury tax, Entertainment Tax, Entry Tax, etc.

The GST Bill was approved by Rajya Sabha unanimously on August 3, 2016, after carrying out certain amendments to the proposed Bill. The Lok Sabha, followed the suit and gave its assent on August 8, 2016. The Bill, which is essentially the prerogative of the NDA Government in power, essentially aimed at removing the additional tax on the Inter-State sale of goods and providing a statutory provision for 100% compensation for the States for any revenue loss for 5 years, among other key highlights.

With the Bill receiving the assent from the President, the green signal for setting up the GST Council within 60 days has been received, which shall comprise of the Union Finance Minister as its Chairman, MOS-Revenue/Finance and State Finance Minister as Members of the Council. The Council shall be concerned with making key recommendation on the rates of GST, list of Exempted Goods and Service, duality of control and adjudication, subsumation of surcharge and cesses, among other key recommendations. In the follow up of the Bill becoming an Act of Parliament, the Central Legislature shall soon consider and pass the Central GST (CGST) and Integrated GST (IGST). The State Legislatures shall also soon pass a State GST (SGST) for the respective States.

 

It is a critical time for all the stakeholders as the Parliament and the State Legislatures are open to suggestion for drafting the CGST, SGST and IGST laws, which are to be passed in the Winter Session of Parliament in November this year.

 

 

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