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GST Bill tabled in LS

NEW DELHI: Seeking to create a seamless and common market for goods and services across the country, Finance Minister Arun Jaitley introduced the Constitution Amendment Bill on Goods and Services Tax (GST) Bill in Lok Sabha today calling it the “single biggest tax reform since Independence”.

GST Bill tabled in LS


Sanjeev Sharma

Tribune News Service

New Delhi, December 19

Seeking to create a seamless and common market for goods and services across the country, Finance Minister Arun Jaitley introduced the Constitution Amendment Bill on Goods and Services Tax (GST) Bill in Lok Sabha today calling it the “single biggest tax reform since Independence”.

Jaitley said the Bill would be taken up in the next Parliament session and said that states would not lose revenue because of the GST tax reform. The government proposes to implement it from April 2016.

The GST Bill was cleared by the Cabinet on Wednesday. The proposed amendments in the Constitution will confer powers both to the Parliament and state legislatures to make laws for levying GST on the supply of goods and services in the same transaction.

The GST Bill is important for the economy for many reasons. It will simplify and harmonise the indirect tax regime in the country. In addition, it will broaden the tax base and result in better tax compliance due to a robust IT infrastructure.

Due to the seamless transfer of input tax credit from one state to another in the chain of value addition, there is an in-built mechanism in the design of GST that would incentivise tax compliance by traders.

It is expected that introduction of GST will foster a common and seamless Indian market and contribute around 2 per cent in GDP growth.

The salient features of the Bill include that the Centre will compensate states for loss of revenue arising on account of implementation of the GST for a period up to five years. A provision in this regard has been made in the Amendment Bill.

The compensation will be on a tapering basis, 100 per cent for first three years, 75 per cent in the fourth year and 50 per cent in the fifth year.

A new Article 279A is proposed for the creation of a Goods and Services Tax Council which will be a joint forum of the Centre and the states. The Council will make recommendations to the Union and the states on important issues like tax rates, exemptions, threshold limits, dispute resolution modalities etc.

All goods and services, except alcohol, will be brought under the purview of GST.

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