- Sanjeev Sirohi 10-08-2015
The Centre is all set to implement the Goods and Services Tax (GST) after it has been passed by the Lok Sabha on 6 May 2015. 352 members voted in favour for the Bill and 37 against it. It now awaits approval from Rajya Sabha.
Needless to say, GST primarily aims to stitch together a common market by dismantling fiscal barriers between the States. It is a single, national, uniform tax, which is levied across the country on all goods and services. Finance Minister Arun Jaitley estimates GST will help increase India’s GDP by around 2%. So far, 18 States have endorsed the draft of the Constitutional Amendment Bill on GST.
The term ‘GST’ is defined in Article 366 (12-A) to mean “any tax on supply of goods or services or both except taxes on supply of the alcoholic liquor for human consumption.” No prizes for guessing that all supply of goods or services will attract Central GST (CGST) and State GST (SGST), unless kept out of purview of GST. This, in effect, means that work contracts will also attract GST.
The Bill specifically provides that petroleum products might not attract GST, but the GST Council may later decide to levy GST on petroleum products as well. Under the GST Bill, there will be one Central GST law and one State GST law each for the States. The GST Bill replaces the lapsed 115th Constitution Amendment Bill, introduced by the UPA Government in March 2011.
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