Status of GST in India as of December 2014

Nothing wrong in tracking one of the most talked tax reforms in India ie Goods and Service Tax. This is the second article [Earlier Article: basics of  GST the biggest tax reform in India] on this topic in our blog. We will continue to write about this topic regularly. This article is about the process of Goods and Service Tax (GST) till December 2014.

The Constitution Amendment Bill 2014 on GST

The Government introduced Constitutional (122^nd) Amendment Bill to facilitate introduction of GST. Is this GST Bill or something else?

To introduce GST, certain Articles of the Constitution have to be amended, omitted or inserted. So, this Bill is all about the changes in the Constitution.

Articles to be inserted are 246A, 269A and 279A.

• Article 246A – Empowers State Legislature to make laws with respect to GST.

• Article 269A – Provides that GST on supplies of the good and services taking place in the course of inter-state trade will be levied and collected by the Union and apportioned between the Union and the States in the manner provided by the Parliament by law on the recommendations of the GST Council.

• Article 279A – Empowers President of India to constitute a Goods and Service Tax (GST) Council within sixty-days of the commencement of the 122nd Constitution Amendment Act

There are certain articles to be omitted for paving the way to introduce GST. Articles to be omitted are 268A, Entry 92 and 92C from Union List, Entry 52 and 55 from State List.  Similarly, Articles to be amended are 248, 249, 250, 268, 269,270,271, 286, 366 and 368.

The salient features are –

• The Bill proposes that both Centre and States would be entitled to concurrently levy GST on goods and services.

• Additional Tax on Interstate Sales – It is proposed that an additional tax on supply of goods, not exceeding one percent, in the course of inter-State trade will be levied and collected by the Union for a period of two years and apportioned to the States.

• It covers all goods and services except alcoholic liquor for human consumption for the levy of GST.

• Petroleum products will be covered under GST from a future date specified by the GST council.

• Tax on Alcohol will continue to be State subject and will continue to be taxed by the States.

• Apart from Central Excise, Service Tax, State VAT, Entry tax will also be repealed. (which means there will be free movement of goods between the states).

• Entertainment Tax will be deleted and subsumed by GST.

• Stamp Duties will continue to be there (No threat to sub-registrar activities!!).

Calculation of GST – It is bit pre-mature at this point in time. We will cover the details of GST as and when some substantial development takes place. Though an optimistic implementation date is April 2016, the transition phase will be atleast 1- 2 years. One can see a full-fledged GST regime from 2017 or 2018

Also Read:

• Background Material on Goods & Service Tax (GST) issued by ICAI
• GST is the biggest tax reform in India. Read to know the basics
• 10 changes expected from GST

Thought for the day

Change isn’t easy, it takes time.

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