Govt introduces Constitution Bill in LS for GST – Dated:- 22-3-2011 – New Delhi, Mar 22 (PTI) The government today introduced a Constitution Amendment Bill in the Lok Sabha to facilitate implementation of the Goods and Service Tax (GST), an indirect tax regime that would subsume levies like excise, service tax and sales tax. The Bill, introduced by Finance Minister Pranab Mukherjee seeks to amend the constitution with a view to confer simultaneous powers on centre and states to levy taxes on goods and services. The GST would replace a number of indirect taxes presently being levied by the central government and the state governments and is intended to remove cascading of taxes and provide a common national market for goods and services , said the statement of objects and reasons of the Bill. The Bill provides for creation of a GST Council to be headed by Union Finance Minister. GST : The Constitution (One Hundered and Fifteenth Amendment) Bill, 2011* [BILL NO. 22 OF 2011] A Bill furthe
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: Provided that Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. Explanation.-For the purpose of this article, State includes a Union territory with Legislature. Amendment of article 248 3. In article 248 of the Constitution, in clause (1), for the word Parliament , the words, figures and letter Subject to article 246A, Parliament shall be substituted. Amendment of article 249 4. In article 249 of the Constitution, in clause (1), after the words with respect to , the words goods and services tax or shall be inserted. Amendment of article 250 5. In article 250 of the Constitution, in clause (1), after the words with respect to , the words goods and services tax or shall be inserted. Amendment of article 268 6. In article 268 of the Constitution, in clause (1), the words and such duties of excise on medicinal and toilet preparations shall be omi
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e deemed to be supply of goods, or of services, or both in the course of inter-State trade or commerce. Explanation II.-For the purpose of this article, State includes a Union territory with Legislature. (2) Parliament may, by law, formulate the principles for determining when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. Amendment of article 270 10. In article 270 of the Constitution,- (i) in clause (1), for the words, figures and letter articles 268,268A and 269 , the words, figures and letter articles 268, 269 and 269A shall be substituted; (ii) after clause (1), the following clause shall be inserted, namely :- (1A) Goods and services tax levied and collected by the Government of India shall also be distributed between the Unionand the States in the manner provided in clause (2). . Amendment of article 271 11. In article 271 of the Constitution, after the words in those articles , the words except the goods and services tax s
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Services Tax Council shall make recommendations to theUnionand the States on- (a) the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed in the goods and services tax; (b) the goods and services that may be subjected to or exempted from the goods and services tax; (c) the threshold limit of turnover below which goods and services tax may be exempted; (d) the rates of goods and services tax; and (e) any other matter relating to the goods and services tax, as the Council may decide. (5) While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market for goods and services. (6) One-third of the total number of members of the Goods and Services Tax Council shall constitute the quorum at its meetings. (7) The Goods and Services Tax Council shall determine the procedure in
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stituted under article 279A that results in a loss of revenue to a State Government or the Government of India or affects the harmonised structure of the goods and services tax. (2) The Goods and Services Tax Dispute Settlement Authority shall consist of a Chairperson and two other members. (3) The Chairperson of the Goods and Services Tax Dispute Settlement Authority shall be a person who has been a Judge of the Supreme Court or Chief Justice of a High Court to be appointed by the President on the recommendation of the Chief Justice of India. (4) The two other members of the Goods and Services Tax Dispute Settlement Authority shall be persons of proven capacity and expertise in the field of law, economics or public affairs to be appointed by the President on the recommendation of the Goods and Services Tax Council. (5) The Goods and Services Tax Dispute Settlement Authority shall pass suitable orders including interim orders. (6) A law made under clause (1) may specify the powers whic
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rvices or both shall be substituted; (iii) for clause (3), the following clauses shall be substituted, namely :- (3) Any law of a State shall, in so far as it imposes, or authorises the, imposition of a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of tax as Parliament may by law specify. (4) Nothing in clause (3) shall apply to a law of a State insofar as it imposes or authorises the imposition of goods and services tax. . Amendment of article 366 14. In article 366 of the Constitution,- (i) after clause (12), the following clause shall be inserted, namely :- (12A) goods and services tax means any tax on supply of goods or services or both except taxes on the supply of the following goods, namely :- (i) petroleum crude; (ii) high speed diesel; (iii) motor spirit (commonly known as petrol); (iv) natur
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produced inIndia, namely:- (a) petroleum crude; (b) high speed diesel; (c) motor spirit (commonly known as petrol); (d) natural gas; (e) aviation turbine fuel; and (f) tobacco and tobacco products. ; (ii) entries 92 and 92C shall be omitted; (b) in List II – State List,- (i) for entry 52, the following entry shall be substituted, namely:- 52. Taxes on the entry of goods into a local area for consumption, use or sale therein to the extent levied and collected by a Panchayat or a Municipality. ; (ii) for entry 54, the following entry shall be substituted, namely:- 54. Taxes on the sale, other than sale in the course of inter-State trade or commerce or sale in the course of international trade and commerce of, petroleum crude, high speed diesel, natural gas, motor spirit (commonly known as petrol), aviation turbine fuel and alcoholic liquor for human consumption. ; (iii) entry 55 shall be omitted; (iv) for entry 62, the following entry shall be substituted, namely:- 62. Taxes on entertai
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nded by this Act), the President may, by order, make such provisions, including any adaptation or modification of any provision of the Constitution or law, as appear to the President to be necessary or expedient for the purpose of removing the difficulty: Provided that no such order shall be made after the expiry of three years from the date of such assent. (2) Every order made under sub-section (1) shall, as soon as may be after it is made, be laid before each House of Parliament. STATEMENT OF OBJECTS AND REASONS The scheme of the Constitution does not provide for any concurrent taxing powers to theUnionas well as the States. It is proposed to introduce the goods and services tax and for this purpose to amend the Constitution conferring simultaneous power on Parliament as well as the State Legislatures including every Union territory with Legislature to make laws for levying goods and services tax on every transaction of supply of goods or services or both. The goods and services tax
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goods outside the purview of the goods and services tax; (b) subsuming of State VAT/Sales Tax, entertainment tax (unless it is levied by the local bodies), Luxury Tax, Taxes on lottery, betting and gambling, tax on advertisements, State Cesses and Surcharges insofar as they relate to supply of goods and services and Entry Tax, not levied by local bodies; (c) levy of Integrated GST (IGST) on inter-State transactions of goods and services; (d) conferring simultaneous power upon Parliament and the State Legislatures to make laws governing goods and services tax; (e) coverage of goods other than crude petroleum, diesel, pertol, aviation turbine fuel, natural gas and alcohol for human consumption under the goods and services tax for the levy of goods and services tax; (f) creation of a Goods and Services Tax Council to examine issues relating to goods and services tax and make recommendations to theUnion and the States on parameters like rates, exemption list and threshold limits; (g) enab
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olic Liquor for human consumption. 3. The Bill seeks to achieve the above objects. New Delhi; Pranab Mukherjee The 16th March, 2011. Presidents recommendation under article 117 of the Constitution of India [Copy of letter No. 31011/04/2009, dated 16-3-2011 from Shri Pranab Mukherjee, Minister of Finance to the Secretary-General, Lok Sabha] The President, having been informed of the subject matter of the proposed Bill, recommends, under clauses (1) and (3) of article 117, read with clause (4) of article 274, of the Constitution of India, the introduction of the Constitution (One Hundred and Fifteenth Amendment) Bill, 2011 in Lok Sabha and also the consideration of the Bill. FINANCIAL MEMORANDUM Clause 12 of the Bill seeks to insert new articles 279A relating to constitution of Goods and Services Tax Council and 279B relating to establishment of Goods and Services Tax Dispute Settlement Authority in the Constitution. The proposed new article 279A seeks to
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ervices Tax Dispute Settlement Authority will involve creation of some posts. Given that the introduction of goods and services tax will make the Indian trade and industry much more competitive, domestically as well as internationally and contribute significantly to the growth of the economy, such additional expenditure on these bodies would be miniscule. It is not practicable to make an estimate of the expenditure, both recurring and nonrecurring on account of the above. However, such expenditure would be considerably marginal. MEMORANDUM REGARDING DELEGATED LEGISLATION Clause 12 of the Bill seeks to insert a new article 279A relating to the constitution of a Council to be called the Goods and Services Tax Council and another article 279B establishing the Goods and Services Tax Disputes Settlement Authority. Clause (1) of the proposed new article 279A provides that the President shall, within sixty days from the date of the commencement of the Constitution (One Hundred and Fifteenth A
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