BASIC CONCEPTS OF GST (PART- 12) – Constitutional Amendment for GST)
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 15-3-2016
The Constitution (115th Amendment) Bill, 2011 proposed to give powers to both, the centre and the states to make laws with respect to GST. The Bill was a necessity because, presently, the Union can not impose excise duty beyond the manufacturing stage and states cannot levy a tax on services. It sought to decide on tax rates, exemptions and threshold limits. It will also make recommendations on taxes, cesses and surcharges by the centre, states and local bodies, which may be subsumed in GST.
Constitution (122nd Amendment) Bill, 2014
The Union Government in third week of December, 2014 (19 December, 2014) introduced Constitution (122nd Amendment) Bill, 2014 in Parliament which when passed shall pave the way for introduction of proposed Goods and Service Tax (GST) in India. This is an improvised version of lapsed 115th Amendment B
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t Features of Constitution (One Hundred And Twenty-Second Amendment) Bill, 2014
The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014 was introduced in the Lok Sabha on December 19, 2014. The following is the gist of amendments proposed by this Bill:
* The Bill seeks to amend the Constitution to introduce the goods and services tax (GST). Consequently, the GST subsumes various central indirect taxes including the Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. It also subsumes state Value Added Tax (VAT)/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc.
Concurrent powers for GST: The Bill inserts a new Article 246A in the Constitution to give the central and state governments the concurrent power to make laws on the taxation of goods and services
Integrated GST (IGST): However, only the centre may levy and collect GST
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embers:
* the Union Finance Minister (as Chairman),
* the Union Minister of State in charge of Revenue or Finance, and
* the Minister in charge of Finance or Taxation or any other, nominated by each state government.
Functions of the GST Council: These include making recommendations on:
* taxes, cess and surcharges levied by the centre, states and local bodies which may be subsumed in the GST;
* goods and services which may be subjected to or exempted from GST;
* model GST laws, principles of levy, apportionment of IGST and principles that govern the place of supply;
* the threshold limit of turnover below which goods and services may be exempted from GST;
* rates including floor rates with bands of GST;
* special rates to raise additional resources during any natural calamity;
* special provision with respect to Arunachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and
* Any other matters
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l.
The net proceeds of additional tax on supply of goods in any financial year, except the proceeds attributable to the Union territories, shall not form part of the Consolidated Fund of India and be deemed to have been assigned to the States from where the supply originates.
Compensation to states: Parliament may by law provide for compensation to states for revenue losses arising out of the implementation of the GST, on the GST Council's recommendations. This would be up to a five-year period.
The Government of India may where it considers necessary in the public interest, exempt such goods from the levy of tax.
Both Centre and States will simultaneously levy GST across the value chain. Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State.
The Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of goods
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