GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) BILL, 2014 – AS PASSED BY LOK SABHA
GST
Dated:- 12-5-2015
THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014
A
BILL
further to amend the Constitution of India.
BE it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:-
Short title and commencement.
1. (1) This Act may be called the Constitution (One Hundredth Amendment) Act, 2015.
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the commencement of that provision.
Insertion of new article 246A.
2. After article 246 of the Constitution, the following article shall be inserted, namely:-
Special provision with respect to goods and services tax.
&quo
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ot;, the words, figures and letter"goods and services tax provided under article 246A 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, figures and letter "goods and services tax provided under article 246A 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 omitted.
Omission of article 268A.
7. Article 268A of the Constitution, as inserted by section 2 of the Constitution (Eighty-eighth Amendment) Act, 2003 shall be omitted.
Amendment of article 269.
8. In article 269 of the Constitution, in clause (1), after the words "consignment of goods", the words, figures and letter "except as provided in article 269A" shall be inserted.
Insertion of new article 269A.
9. After article 269 of the C
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Contitution,-
(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) The goods and services tax levied and collected by the Government of India, except the tax apportioned with the States under clause (1) of article 269A, shall also be distributed between the Union and 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, figures and letter ''except the goods and services tax under article 246A,'' shall be inserted.
Insertion of new article 279A.
12. After article 279 of the Constitution, the following article shall be inserted, namely:-
Goods and Services Tax Council.
''279A. (1)The President shall, within sixty days from the date of commencement of the Consti
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tax;
(b) the goods and services that may be subjected to, or exempted from the goods and services tax;
(c) model Goods and Services Tax Laws, principles of levy, apportionment of Integrated Goods and Services Tax and the principles that govern the place of supply;
(d) the threshold limit of turnover below which goods and services may be exempted from goods and services tax;
(e) the rates including floor rates with bands of goods and services tax;
(f) any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster;
(g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and
(h) any other matter relating to the goods and services tax, as the Council may decide.
(5) The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high s
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have a weightage of two-thirds of the total votes cast, in that meeting.
(10) No act or proceedings of the Goods and Services Tax Council shall be invalid merely by reason of-
(a) any vacancy in, or any defect in, the constitution of the Council; or
(b)any defect in the appointment of a person as a member of the Council; or
(c) any procedural irregularity of the Council not affecting the merits of the case.
(11) The Goods and Services Tax Council may decide about the modalities to resolve disputes arising out of its recommendation.”.
Amendment of article 286.
13. In article 286 of the Constitution,-
(i) in clause (1),-
(A) for the words "the sale or purchase of goods where such sale or purchase takes place", the words "the supply of goods or of services or both, where such supply takes place" shall be substituted;
(B) in sub-clause (b), for the word “goods”, at both the places where it occurs the words “goods or services or both” shall be substituted;
(i
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ll be substituted.
Amendment of Sixth Schedule
16. In the Sixth Schedule to the Constitution, in paragraph 8, in sub-paragraph (3),-
(i) in clause (c), the word "and" occurring at the end shall be omitted;
(ii) in clause (d), the word "and" shall be inserted at the end;
(iii) after clause (d), the following clause shall be inserted, namely:-
"(e) taxes on entertainment and amusements.".
Amendment of Seventh Schedule.
17. In the Seventh Schedule to the Constitution,-
(a) in List I – Union List,-
(i) for entry 84, the following entry shall be substituted, namely:-
"84. Duties of excise on the following goods manufactured or produced in India, 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) entry 52 shall be omitted;
(ii)
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cle 269A, be levied and collected by the Government of India for a period of two years or such other period as the Goods and Services Tax Council may recommend, and such tax shall be assigned to the States in the manner provided in sub-section (2).
(2) 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.
(3) The Government of India may, where it considers necessary in the public interest, exempt such goods from the levy of tax under sub-section (1).
(4) Parliament may, by law, formulate the principles for determining the place of origin from where supply of goods take place in the course of inter-State trade or commerce.
(5) For the purpose of this section, “State” shall have the meaning assigned to it in clause (26B) of article 366 of the Constitution.
Compensati
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ing any difficulty in relation to the transition from the provisions of the Constitution as they stood immediately before the date of assent of the President to this Act to the provisions of the Constitution as amended by this Act), the President may, by order, make such provisions, including any adaptation or modification of any provision of the Constitution as amended by this Act 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 Constitution is proposed to be amended to introduce the goods and services tax for conferring concurrent taxing powers on the Union as well as the States including Union territory with Legislature to make laws for levying goods and ser
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goods and services;
(b) subsuming of State Value Added Tax/Sales Tax, Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States), Octroi and Entry tax, Purchase Tax, Luxury tax, Taxes on lottery, betting and gambling; and State cesses and surcharges in so far as they relate to supply of goods and services;
(c) dispensing with the concept of 'declared goods of special importance' under the Constitution;
(d) levy of Integrated Goods and Services Tax on inter-State transactions of goods and services;
(e) levy of an additional tax on supply of goods, not exceeding one per cent. In the course of inter-State trade or commerce to be collected by the Government of India for a period of two years, and assigned to the States from where the supply originates;
(f) conferring concurrent power upon Parliament and the State Legislatures to make laws governing goods and services tax;
(g) coverage of all goods and servi
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that every decision of the Council shall be taken by a majority of not less than three-fourths of the weighted votes of the members present and voting in accordance with the following principles:-
(A) the vote of the Central Government shall have a weightage of one-third of the total votes cast, and
(B) the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast in that meeting.
Illustration:
In terms of clause (9) of the proposed article 279A, the "weighted votes of the members present and voting" in favour of a proposal in the Goods and Services Tax Council shall be determined as under:-
WT = WC+WS
Where,
WT = WC+WS × SF
Wherein-
WT = Total weighted votes of all members in favour of a proposal.
WC = Weighted vote of the Union = i.e., 33.33% if the Union is in favour of the proposal and be taken as "0" if, Union is not in favour of a proposal.
WS = Weighted votes of the States in favour of a pr
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of the Constitution of India, the introduction of the Constitution (One Hundred and Twenty-second Amendment) Bill, 2014 in Lok Sabha and also the consideration of the Bill.
FINANCIAL MEMORANDUM
Clause 12 of the Bill seeks to insert a new article 279A in the Constitution relating to
Constitution of Goods and Services Tax Council. The Council shall function under the Chairmanship of the Union Finance Minister and will have the Union Minister of State incharge of Revenue or Finance as member, along with the Minister in-charge of Finance or Taxation or any other Minister nominated by each State Government.
2. The creation of Goods and Services Tax Council will involve expenditure on office expenses, salaries and allowances of the officers and staff. The objective that the introduction of goods and services tax will make the Indian trade and industry more competitive, domestically as well as internationally and contribute significantly to the growth of the economy, such additional expe
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