Goods and Services Tax

FEMA – 93 – Dated:- 1-4-2015 – RBI/2014-15/534 A.P. (DIR Series) Circular No. 93 April 1, 2015 To All Category – I Authorised Dealer Banks Madam/ Sir, Export of Goods and Services – Project Exports Attention of Authorised Dealers is invited to A. P. (DIR Series) Circular No. 11 dated July 22, 2014 in terms of which AD banks / Exim Bank have been permitted to consider according post-award approvals without any monetary limit and permit subsequent changes in the terms of post award approval within the relevant FEMA guidelines / regulations. Further, in terms of para B. 11 (i) of the revised Memorandum of instructions on Project and Service exports, Exim Bank in participation with commercial banks in India may extend Buyer s credit upto the l

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Dated:- 25-3-2015 – Minister of Urban Development Shri M.Venkaiah Naidu has favoured a share of GST(Goods and Services Tax) revenue for the municipalities across the country to ensure predictable and guaranteed flow of funds to enable them take up urban reconstruction initiatives. He expressed concern over the huge urban fiscal gap while addressing a National Workshop on Governance, Administrative Reforms and Capacity Building here today. The Workshop was organized by the Indian Council for Research in International Economic Relations (ICRIER) with the support of the Ministry of Urban Development. Shri Venkaiah Naidu said that the country s municipalities are the weakest in the world in terms of access to resources, financial autonomy and

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oing towards payment of salaries leaving only a little for mandated functions and development activities. The Minister emphasized that Public-Private-Partnership model is a crucial vehicle for mobilizing huge order of resources required for building smart cities and bridging the huge infrastructure deficit in other urban areas. Shri Naidu observed that the success of PPP in India is associated with projects that are technically simple, have small gestation periods and allow easy estimation of costs but PPP is needed more in the more complex infrastructure projects and this shall be made a success through good governance and institutional framework. Expressing concern over inadequate capacities of urban local bodies, Shri Naidu informed that

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VAT and Sales Tax – Classification of Cord wire – Electronic good or Electrical good – the cord wire connecting the main switch with the instrument would not fall under the category of electrical good

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Centre includes compensation in GST Constitutional Amendment Bill – Dated:- 19-3-2015 – The Centre has included in the GST Constitutional Amendment Bill the compensation which will be paid to states for revenue loss on account of rolling out the new indirect tax regime, Parliament was informed. To a written question on whether the compensation in GST has been incorporated in the Constitutional Amendment Bill, Minister of State for Finance Jayant Sinha said: Yes . Elaborating further, he said that as per the provisions of the Bill, Parliament may on the recommendation of the GST Council, provide for compensation to the states for loss of revenue arising on account of implementation of the GST for such period which may extend to five years .

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Tax in General + Budget + Finance Acts – By: – CA DEV KUMAR KOTHARI – Dated:- 4-3-2015 – The budget 2015 has given benefit for poor people by way of common pools and not directly. Any person whether poor or rich has to pay taxes similarly for many essential items for consumption or services. This is not justified. Taxes must be according to capacity to pay: The well-known cannon of taxation is that tax must be according to capacity to pay. Therefore, there must be some regard and relaxation for essential goods and services. Some common items becoming costlier or cheaper for common and other people. Bhojan and essentials for living -commonly known Roti, kapra aur makan: Essential goods and services are equally important for poor and rich. Therefore, there must be some regard for poor people. The quantity and quality are important factors. A poor man consumes many items in lesser quantity and of lower price. However some items of consumption and services are priced similarly for poor an

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tobacco items will be more expensive, Good for society as a whole – for better health and environment. Less use of tobacco for smoking will reduce carbon emission also. However, considering that tobacco is an essential item for many poor people also,- they must get some concession. All services becoming costlier For poor people there must be some exemption on essential services. For example telephone , mobile phone, internet bill up to ₹ 300/- per month can be exempted. Similar concessions must be be given for other items of essential nature. Completely built imported commercial vehicles. Cement For affordable housing some concession must be given – area wise or for first time small house at least. Aerated, flavoured drinks and packaged water Packaged water must be exempted, it is essential. On many railway stations, bus stops we do not find good quality

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e ₹ 1,000 per pair The exemption must be restricted up to MRP of ₹ 1500/- or 2000/- per pair. Above that, must bear more taxes as they are more for brands and fashion and not as essential item. Locally made mobile phones, LED/LCD panels, LED lights and LED Lamps The government authorities must also take care to see that quality of such goods improves and one has to be satisfied with made in India product, of top class quality good . Solar Water heater Pacemakers Mal practices in medical services to implant pacemakers even when not necessary msut be curbed. Ambulance Not only chassis, other parts of ambulance must also be made cheaper. Ambulance services It is an essential services – must get full exemption. Computer tablets Agarbattis Agarbattis are made o

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panded with a view to increasing the number of beneficiaries from the present 1 crore to 10.3 crore. Similarly, ₹ 6,335 crore have so far been transferred directly, as LPG subsidy to 11.5 crore LPG consumers. I am sure, persons who are better-off, such as those in the top tax bracket, and those genuinely concerned for the welfare of the poor, such as members of this House, will give up their LPG subsidy voluntarily. In my two articles webhosted on this website I had already mentioned for such voluntary disclaimer of subsidy on LPG cylinders. As soon as I became aware of disclaimer option for subsidy I requested , my wife CA Uma Kothari and my daughter Dr. Shweta Kothari -Singla, (both are subscribers for LPG cylinder in their names) and both have disclaimed subsidy in their subscribers accounts. In my articles, I have appealed to readers who are professionals and well to do and can forgo subsidy. I spoke to some other professionals and executive, but I found response not very enc

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Goods and Service Tax – GST – By: – Deepak Aggarwal – Dated:- 2-3-2015 Last Replied Date:- 30-12-1899 – Goods and Services Tax (GST) Here are the relevant extract of GST reference in Budget speech 2015 and other budget documents – We are now embarked on two more game changing reforms. GST and what the Economic Survey has called the JAM Trinity – Jan Dhan, Aadhar and Mobile – to implement direct transfer of benefits. GST will put in place a stateof-the-art indirect tax system by 1st April, 2016. The JAM Trinity will allow us to transfer benefits in a leakage-proof, well-targetted and cashless manner. We need to revive growth and investment to ensure that more jobs are created for our youth and benefits of development reach millions of our poor. We need an enabling tax policy for this. I have already introduced the Bill to amend the Constitution of India for Goods and Services Tax (GST) in the last Session of this august House. GST is expected to play a transformative role in the way

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to excise levy on cigarettes and the compounded levy scheme applicable to pan masala, gutkha and certain other tobacco products. Introduction of GST is eagerly awaited by Trade and Industry. To facilitate a smooth transition to levy of tax on services by both the Centre and the States, it is proposed to increase the present rate of service tax plus education cesses from 12.36% to a consolidated rate of 14%. Hassle Free Business Environment: Created a non-adversarial tax regime, ending tax terrorism; Secured the political agreement on the goods and services tax (GST), that will allow legislative passage of the constitutional amendment bill. The debate whether to introduce a Goods and Services Tax (GST) must now come to an end. We have discussed the issue for the past many years. Some States have been apprehensive about surrendering their taxation jurisdiction; others want to be adequately compensated. I have discussed the matter with the States both individually and collectively. I d

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or achieving the budget targets in FY 2015-16 14. In the medium term, the most significant step from the point of view of broadening the tax base and improving revenue efficiency through better compliance is the introduction of Goods and Services Tax (GST). As far as Central taxes viz. Central Excise duties and Service Tax are concerned, a fair amount of integration has already been achieved, especially through the cross-flow of credits across the two taxes. It would be possible to realize full integration of the taxation of goods and services only when the State VAT is also subsumed and a full-fledged GST is launched. As a preparation for introduction of Goods and Service Tax (GST), Government has been taking consistent policy steps to expand the scope of service tax. To broaden the tax base, negative list approach to taxation of services was introduced with effect from 1st July, 2012. Negative List of Services and service tax exemptions were reviewed for broadening the tax base and a

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Corporate Tax to be Reduced and GST to be Implemented – Dated:- 28-2-2015 – The Finance Minister Shri Arun Jaitley has said that the Corporate Tax Rate is proposed to be reduced from the current 30% to 25% over the next 4 years. In his Budget Speech in the Lok Sabha here today, Shri Jaitley said this is expected to lead to higher level of investment, higher growth and more jobs. The Minister however said that the reduction has to be accompanied by rationalization and removal of various kinds of exemptions and incentives which is leading to a large number of tax disputes. He pointed out that the effective collection of Corporate Tax today is about 23%. The Finance Minister said he did not start the process of reduction right away as he wante

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GST TRADE NOTICE NO. 52/2017 Dated:- 27-2-2015 Trade Notice – Circulars – GST – OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE, PUDUCHERRY COMMISSIONERATE GOUBERT AVENUE, (BEACH ROAD) PUDUCHERRY 605001 Dated: 27-02-2015 GST TRADE NOTICE NO. 03/2015 Subject: Reg. Central Board of Excise Customs (CBEC) is committed to encourage, facilitate and assist its existing assessees to voluntarily discharge their tax obligation and to provide them service necessary in meeting these obligations. CBEC is also committed to discharge all its functions in a fair, impartial, transparent and consistent manner. The Government of India has authorized CBEC to implement Service Delivery Excell

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munications within 7 working days, ii. Convey decision on matters within 15 days, iii. Release of seized documents within 60 working days if they are not required by the department, iv. Acknowledge complaints within 48 hours and attempt to provide final replies within 30 working days. 3 Citizens / Clients / Trade are advised to submit all written communications including intimations, applications, declarations, etc pertaining to Head Quarters Office, Puducherry Commissionerate in Centralized receipt section(Common Facility Centre) at the O/o the Commissioner of Central Excise Service Tax, Beach Road, Goubert Avenue, Puducherry – 605001 and obtain dated spot acknowledgement Additionall

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VAT and Sales Tax – Classification of goods – Levy of tax on Image Runners @4% or @12% – Image Runners (Multi-function Network Printer) – Goods in question partake the character of peripheral of a com

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Goods and Service Tax – GST – By: – Deepak Aggarwal – Dated:- 7-2-2015 – GST……Goods and Services Tax Part-D First Discussion Paper on GST Fourth Segment (annexure) has twenty (20) Frequently Asked Questions and Answers (FAQ) on GST. 1st Question- Justification of GST- already covered in earlier articles. In net shell, GST is not simply VAT plus Service tax but a major improvement over the previous current system. 2nd Question- Meaning of GST and its working model- already covered in earlier articles. In net shell, GST is a tax on goods and services in which final consumer will be charged only GST charged by the last dealer. There will be no double taxation and tax on tax impact anywhere in supply chain. 3rd Question- Logic that GST will reduce the burden of tax, in general- already covered in earlier articles. In net shell, there will be no cascading effect of taxes on goods and services. There will be a set off from the producer s point to the retailer s point. Also

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gested in GST model. 7th Question- Benefits of GST to the common consumers- Already explained in 3rd Question. In general, burden of tax on goods would fall under GST and would benefit the consumers. 8th Question- Salient features of the proposed GST model- Already covered in earlier articles. In net shell, GST will be charged on all goods and services except exempted goods and services. There will be dual GST. One will be charged by the central in the form of CGST and second concurrently will be charged by the States in the form of SGST. For interstate sale, IGST mechanism is introduced. Cross utilization of input tax credit between the CGST and SGST will not be allowed. Each taxpayer will be allotted a PAN linked tax payer identification number with a total of 13/15 digits. 9th Question- Requirement of Dual GST- Due to constitutional requirement of fiscal federalism, dual GST model is recommended. 10th Question- Mechanism of Concurrently taxation by centre and states on a particu

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exemption for GST- Threshold exemption is provided to keep small traders out of tax net. Also Small traders get advantage over large enterprises on account of lower tax. Same time it is difficult to administer small traders and cost of administering of such traders is very high in comparison to revenue contribution by them. 14th Question- Scope of Composition and Compounding scheme- The Composition/ Compounding scheme under GST will have an upper ceiling on gross annual turnover and a floor tax rate. Limit of ₹ 50 lacs of the gross annual turnover and 0.5% floor tax rate is recommended in GST model. Also optional registration will be allowed for the dealers with turnover below the compounding cutoff. 15th Question- Mechanism of taxation of Imports under GST- A constitutional amendment is required for taxation of imports. Both CGST and SGST will be levied on imports. The incidence of tax will be destination of goods and services and the tax revenue in case of SGST will accrue th

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Goods and Service Tax – GST – By: – Deepak Aggarwal – Dated:- 7-2-2015 – GST……Goods and Services Tax Part-C First Discussion Paper on GST Second Segment explains the process of preparation for GST which is already covered in my first article- Part-A. Third Segment explains in detail the comprehensive structure of the GST model in India. India is country which have a federal system in which Centre and State both have powers in their domain and legislation in which they operate. Due to federal system, a Dual GST structure is recommended in India. In Dual GST structure, Central and State will have pre-defined functions and responsibilities. GST will have two components. One component will be Central GST (CGST) which will b

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ss all states. In case of CGST, threshold limit suggested for goods is ₹ 1.5 crore and in case of services, a higher limit is desirable. The CGST and SGST will be paid separately to accounts of Central and state government respectively. The CGST and SGST will be treated separately. In books of accounts, there will be separate accounts for the utilization or refund of credit. Cross utilization of Input tax credit (ITC) between the CGST and SGST will not be allowed. The Central government and State government would have concurrent jurisdiction in GST model. CGST will be administered by Central government and SGST will be administered by State government. A Composition / Compounding scheme is also suggested in GST model. The Scheme

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State Taxes will be subsumed in GST. Central Taxes subsumed in GST are Central Excise duty, Additional Excise duties, Excise duty levied under MTP Act, Service Tax, Additional Custom duty (CVD), Special additional duty (SAD), Surcharges and Cesses. State Taxes subsumed in GST are VAT/Sales tax, Entertainment tax, Luxury tax, Taxes on lottery, betting and gambling, State Cesses and Surcharges related to supply of goods and services and Entry tax. Regarding Purchase tax, it is not clear that whether it will be subsumed in GST or not. Some specific provisions for specific commodities are also suggested. E.g. Alcoholic beverage, Petroleum products would be kept outside ambit of GST. In case of Interstate transactions, IGST model is suggeste

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Goods and Service Tax – GST – By: – Deepak Aggarwal – Dated:- 6-2-2015 – GST……Goods and Services Tax Part-B First Discussion Paper on GST- 1st Segment First Segment of First Discussion Paper on GST explains a brief reference to the process of introduction of VAT in the Centre and in the States and also areas where needs further improvements i.e. justification for GST. Introduction of VAT In India, VAT was introduced at the Central level for a selected number of commodities in terms of MODVAT w.e.f March, 1986 and later it is extended to all commodities in terms of CENVAT w.e.f. 2002-03. Later on Service tax was added to CENVAT w.e.f. 2004-05. Vat was introduced at the State level beginning from April, 2005. Before introdu

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veral Central taxes e.g. additional customs duty, surcharges etc. – Non-inclusion of value added chain in the distribution trade below the manufacturing level Shortcomings- at State level -Non-inclusion of several state taxes e.g. luxury tax, entertainment tax etc. -Cascading effect on account of Cenvat element i.e. excise duty on the goods remains included in the value of goods to be taxed under state VAT – No credit of input services at state level After introduction of GST, all shortcomings at Central and State level will be removed. At Central level -GST will provide comprehensively more indirect central taxes -Integrate goods and service taxes for the purpose of set-off relief -Widening of dealer base by capturing the value addition i

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Goods and Service Tax – GST – By: – Deepak Aggarwal – Dated:- 5-2-2015 – GST……Goods and Services Tax Part-A First Discussion Paper on GST GST comes in picture when in Central Budget 2007-08, Union Finance Minister made an announcement that GST will be introduced from 1st April, 2008. The task given to Empowered Committee of State Finance Ministers to make a road map for GST in consultation with Central Government. The Empowered Committee decided to setup a Joint Working Group in May, 2007. The Joint Working Group submits its report on GST in Nov.2007. The report submitted by Joint Working Group was discussed in detail and a final version of the views on GST of Empowered Committee was sent to the Government of India in Ap

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Goods and Services Tax – Started By: – ganeshan kalyani – Dated:- 31-1-2015 Last Replied Date:- 11-2-2015 – Dear Expert, I would request to give a list of country in sequence of implementation of GST. regards, ganeshan – Reply By Pradeep Khatri – The Reply = Dear Ganeshan, Please check the following link:- http://gst.customs.gov.my/en/gst/Pages/gst_ci.aspx Regards Sameer Malhotra – Consultant YAGAY and SUN (Management, Business and Indirect Tax Consultants) – Reply By MARIAPPAN GOVINDARAJAN – T

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Goods and Service Tax (GST) – PPT by Indirect Committee of ICAI – Dated:- 17-1-2015 – Constitution Amendment Bill in the Lok Sabha today with respect to Goods and Services Tax (GST) – News – Press release

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VAT and Sales Tax – TNGST – when the invoice of the petitioner contemplates interest on delayed payment, the Tribunal was justified in including the same in the taxable turnover – HC – TMI Updates – Highlights

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Goods and Service Tax – GST – By: – CA.Ankit Gulgulia – Dated:- 31-12-2014 Last Replied Date:- 30-12-1899 – One of the major Indirect tax reforms that the country is now on road to witness is the incarnation of a single GST law instead of multiple indirect taxes viz Service Tax, Central Excise, VAT, CST, Local Body Tax, Entry Tax etc. After a round of discussions of Hon ble Finance Minister with State FM s, the Government of India has tabled the GST Bill (No. 192 – Constitutional Amendment), 2014 on 19th December,2014. The clause by clause analysis of GST Bill, 2014 is as under:- Insertion of Clause 246A – To Facilitate the Parliament and States to make laws in regard to Goods and Service Tax Imposed by Union or such State 246A(1) – Notwithstanding anything contained in articles 246 and 254, Parliament, and. subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such state. (2) Parliament has ex

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ase where the service tax / excise was centre s domain in union list and sales tax on goods was state s domain except in case of interstate transactions. Article 246(2) reestablishes the centre s exclusive control on interstate supply of goods and services. Importantly interstate supply of services will mark its separate significance in the proposed GST regime. Article 279A is proposed for setup of GST Council within 60 days of commencement of this Act, 2014. The items proposed in article 279A (5) includes petroleum crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel. The date on which GST is to be levied on these items is to be recommended by GST council. Facilitative amendments in Article 248(1), 249(1), 250(1), 268(1), 269(1), 270(1), 286. Omitting Article 268A. BRIEF ANALYSIS Article 248(1) empowers the parliament to make laws on any matters not covered in state list and concurrent list. Hence in a sense this article is giving powers on residual

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the same to be assigned to states. Now, the interstate supply of goods and services has been made an exception to this pure assignment to states since service now covered. A separate article 269A has been inserted to apportionate the taxes. Article 270 provides for apportionment of taxes and duties between Union and State. The Interstate GST has been kept out of this by inserting necessary exception. The reason for this exception is since the apportionment in interstate s case is not to be undertaken as per Article 270 laid mechanism but on recommendations of GST council as facilitated under Article 269A. In other cases of GST levied by government of India, a new clause 270(1A) is inserted and apportionment to be in accordance with normal provisions of Article 270 only. Article 286 imposes restrictions for imposition of taxes on sale or purchases of goods in case of interstate trade, imports or exports or trade outside the state. It empowers the parliament for the same. Now, this is e

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e of interstate trade or commerce would also required to be made a commodity of due apportionment between union and states instead of pure assignment as in cases of goods. This article 269A is inserted precisely to mitigate this aspect. The apportionment shall be undertaken pursuant to GST Council s recommendation. To understand what transaction would constitute interstate trade, the rules of supply, origin and point of incidence would be required to be framed. The same would be in parliament s domain. Surcharge by Parliament not to Apply to GST Article 271 empowers the parliament to increase taxes and duties on articles. The GST has been made an exception to power of parliament. Hence, the parliament cannot impose surcharge on GST. Constituting the GST Council vide Article 279A BRIEF ANALYSIS Article 279A is to be inserted to empower the Hon ble President of India to constitute GST Council . Brief features shall be :- To be incorporated within 60 days of Commencement of Act. Membe

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mir, Manipur; Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and Any other matter relating to the goods and services tax, as the Council may decide. Date of levy of GST on items like petrol, diesel and natural gas. Quorum shall be 50% of members Decision by 75% of total weighted votes of members present and voting. Centre to have 1/3rd of weight of total votes and states to have 2/3rd of total votes cast. Dispute resolution modalities. New Definitions – Article 366 12A) goods and services tax means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption Hence it would exclude alcoholic liquor currently. '(26A) Services means anything other than goods Anything other than goods is service reflects wide interpretation of what constitutes services. Amendments in Union, State List of Schedule VII of Constitution. Also, amendment in Sixth Schedule. BRIEF ANALYSIS Schedule VI Par

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rade or international trade or commerce. Other Modalities An additional tax on supply of goods, not exceeding one per cent. in the course of inter-State trade or commerce shall, notwithstanding anything contained in clause (I) of Article 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 manner as provided hereunder in (b) 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. The Government of India may, where it considers necessary in the public interest, exempt such goods from the levy of tax under clause (1). Key Note: – This is exemption pertaining to the additional tax as referred above. Parliament may, by law

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Goods and Service Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 30-12-2014 Last Replied Date:- 30-12-1899 – Meaning of Goods / Services / GST The Constitutional Amendment Bill defines these terms- goods includes all materials, commodities, and articles; [article 366 (12)] services means anything other than goods: [article 366 (26A)] goods and services tax means any tax on supply of goods or services or both except taxes on the supply of the alcoholic liquor for human consumption; [article 366 (12A)] Loss of Revenue / Compensation Parliament may, by law, on the recommendation of the Goods and Services Tax Council, provide for implementation of the goods and services tax for such period which may extend to five years. GST Structure Th

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will be formed by the Parliament. The Central Government would also have power to grant exemption to any goods from this tax. The point to be noted here is that this tax is to be levied on goods only, thus the differentiation between goods and services would again resume significance. The proposed amendment in Article 271 restricts the power of the Central Government to levy any surcharge on the GST. Taxes to be subsumed in GST GST will subsume the following Central and State indirect taxes: Union Taxes State Taxes Central Excise Duty and additional excise duty, CVD and SAD on import of goods, Excise duty levied under Medicinal and Toilet Preparation (Excise Duties) Act, 1955,

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ambling and entertainment and amusement are covered under the GST. However, alcoholic liquor for human consumption has been kept out of GST ambit. Way forward Going by the present mood, the Government of the day feels that it may be able to introduce GST in India w.e.f. 1st April 2016, replacing a host of indirect taxes presently levied by the centre, states and local bodies. It hopes for the parliamentary nod (two-third majority) in the forthcoming Budget session in February, 2015. This is necessary as the Indian Constitution requires amendment to allow states to tax services and the centre to tax goods at the retail level and to provide legal framework for GST by providing for constitution of a GST Council and dispute settlement mechanism

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Goods and Service Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 29-12-2014 Last Replied Date:- 31-1-2015 – The Union Government on 19 December, 2014 introduced Constitution (122 Amendment) Bill, 2014 in Parliament which when passed shall pave the way for introduction of proposed Goods and Service Tax (GST) in India. It is to be very clearly understood that this is not a GST Bill. In fact, GST Bill is not in sight at all at this moment. What has been introduced is the Constitutional Amendment Bill enabling or empowering the Government to levy a tax called GST which it cannot levy under the present Constitution. The Bill on passage would enable the Central Government and the State Governments to levy GST. This tax (GST) shall be levied concurrently by various states as well as Union Government. Once this is passed by two-third majority in the Parliament, atleast 50 percent of the states will have to pass it. Once this amendment is through, the road will be clear for GST Bill (and then

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and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. Clause 269A Goods and services tax on supplies in the course of inter-State trade or commerce shall be levied and collected by the government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council. Supply of goods or services, or both in the course of import into the territory of India shall be deemed to be supply of goods or services, or both in the course of inter-state trade or commerce. Parliament may, by law, formulate the principles for determining the place of supply, and when a supply of goods or of services, or both takes place in the course of inter-state trade or commerce. Clause 279A The President shall, within sixty days from the date of commencement of the Constitution (One Hundred and Twenty-second Amendme

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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. What will Service Tax Council do Apart from aforementioned recommendations, it shall undertake the following – The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel. While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonized structure of goods and services tax and for the development of a harmonized national market for goods and services. The Goods and Services Tax Council shall determine the procedure in the performance of its functions. The Goods and Services Tax Council may decide about the modalities to resolve disputes arising out of its rec

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Goods and Service Tax – GST – By: – CA Akash Phophalia – Dated:- 26-12-2014 Last Replied Date:- 30-12-1899 – GST Modality There are three models namely Central GST, State GST and Dual GST. Dual GST can further be implwmented in two ways – Concurrent GST and Non- Concurrent GST. 1. CENTRAL GST : Under this option, the two levels of government would combine their levies in the form of a single National GST, with appropriate revenue sharing arrangements among them. The tax could be controlled and administered by the central government. 2. STATE GST : The second model is to have a state GST in which the states alone levy Tax and the Centre withdraws from the field of GST or VAT completely. In this case, the state GST will work as the redistrib

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Goods and Service Tax – GST – By: – CA Akash Phophalia – Dated:- 26-12-2014 Last Replied Date:- 30-12-1899 – Why GST??? Presently the tax structure of India is very complex and Central and State both are charging taxes on goods. Although tax credit mechanism is in place but that too needs to be rationalized. Central is also imposing taxes on services. Looking to the global developments and tax structure of developed countries GST is the need of the hour. The need of GST can further be explained in the following points :- In the present tax structure there is no system of providing input credit mechanism in between taxes levied by state and the centre. Thus, cascading effect arises. There are various definitional issues related to manufac

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By: – Deepak Aggarwal – Goods and Services Tax – GST – Dated:- 24-12-2014 – – THE CONSTITUTION (122 nd AMENDMENT) BILL, 2014 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. (Refer Italic portion for changes) Insertion of new article 246A (Main provision inserted for GST) Special provision with respect to goods and services tax Subject to below clause, the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State. 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

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tanding anything in the foregoing provisions of this Chapter, if the Council of States has declared by resolution supported by not less than two-thirds of the members present and voting that it is necessary or expedient in the national interest that Parliament should make laws with respect to goods and services tax provided under article 246A or any matter enumerated in the State List specified in the resolution, it shall be lawful for Parliament to make laws for the whole or any part of the territory of India with respect to that matter while the resolution remains in force. Amendment of article 250 Existing clause : Notwithstanding anything in this Chapter. Parliament shall, while a Proclamation of Emergency is in operation, have power to make laws for the whole or any part of the territory of India with respect to any of the matters enumerated in the State List. Amended clause : Notwithstanding anything in this Chapter. Parliament shall, while a Proclamatio

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States within which such duties are respectively leviable. Omission of article 268A Omitted Clause : (1)Taxes on services shall be levied by the Government of India and such tax shall be collected and appropriated by the Government of India and the States, in the manner provided in clause (2). (2) The proceeds in any financial year of any such tax levied in accordance with the provisions of clause (I) shall be- (a) collected by the Government of India and the States; (b) appropriated by the Government of India and the States, in accordance with such principles of collection and appropriation as may be formulated by Parliament by law. Amendment of article 269 Existing clause : (1) Taxes on the sale or purchase of goods and taxes on the consignment of goods shall be levied and collected by the Government of India but shall be assigned and shall be deemed to have been assigned to the States on or after the 1st day of April, 1996 in the manner provided in cla

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n taxes on sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce; (b) the expression taxes on the consignment of goods shall mean taxes on the consignment of goods (whether the consignment is to the person making it or to any other person), where such consignment takes place in the course of inter-State trade or commerce. Insertion of new article 269A Levy and collection of goods and service tax in course of interstate trade or commerce Goods and services tax on supplies in the course of inter-State trade or commerce shall be levied and collected by the government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council. Explanation.For the purposes of this clause, supply of goods, or of services, or both in the course of import into the territo

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ctively, surcharge on taxes and duties referred to in article 271 and any cess levied for specific purposes under any law made by Parliament shall be levied and collected by the Government of India and shall be distributed between the Union and the States in the manner provided in clause (2). (1A) The goods and services tax levied and collected by the Government of India, except the tax apportioned with the States under clause (I) of article 269A, shall also be distributed between the Union and the States in the manner provided in clause (2). Amendment of article 271 Existing clause : Notwithstanding anything in articles 269 and 270 . Parliament may at any time increase any of the duties or taxes referred to in those articles by a surcharge for purposes of the Union and the whole proceeds of any such surcharge shall form part of the Consolidated Fund of India. Amended clause Notwithstanding anything in articles 269 and 270 . Parliament may at any time incre

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all, as soon as may be, choose one amongst themselves to be the Vice-Chairperson of the Council for such period as they may decide. (4) The Goods and Services Tax Council shall make recommendations to the Union and the States on- (a) the taxes, cesses and surcharges levied by the Union, 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) 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 prov

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ctions. (9) Every decision of the Goods and Services Tax Council shall be taken at a meeting, 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, namely: (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. (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.

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of the tax as Parliament may by law specify. Amended clause: (1) No law of a State shall impose, or authorise the imposition of a tax on the supply of goods or of services or both, where such supply takes place the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods goods or services or both into, or export of the goods goods or services or both out of, the territory of India. (2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place supply of goods or of services or both in any of the ways mentioned in clause (I). (3) Any law of a State shall, in so far as it imposes, or authorises the imposition of,- (i) 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; or (b) a tax on the sale or purchase of goods, being a tax of the natu

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Constitution may be initiated only by the introduction of a Bill for the purpose in either House of Parliament, and when the Bill is passed in each House by a majority of the total membership of that House and by a majority of not less than two-thirds of the members of that House present and voting, it shall be presented to the President who shall give his assent to the Bill and thereupon the Constitution shall stand amended in accordance with the terms of the Bill: Provided that if such amendment seeks to make any change in- (a) article 54 , article 55 , article 73 , article 162 or article 241 , or (b) Chapter IV of Part V, Chapter V of Part VI, or Chapter I of Part Xl. or (c) any of the Lists in the Seventh Schedule , or (d) the representation of States in Parliament, or (e) the provisions of this article, the amendment shall also require to be ratified by the Legislatures of not less than one-half of the States by resolutions to that effect passed by tho

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or (e) the provisions of this article, the amendment shall also require to be ratified by the Legislatures of not less than one-half of the States by resolutions to that effect passed by those Legislatures before the Bill making provision for such amendment is presented to the President for assent.. Amendment of Sixth Schedule Existing Schedule: 8 (3) The District Council for an autonomous district shall have the power to levy and collect all or any of the following taxes within such district, that is to say (c) taxes on the entry of goods into a market for sale therein, and tolls on passengers and goods carried in ferries; and (d) taxes for the maintenance of schools dispensaries or roads. Amended Schedule: 8 (3) The District Council for an autonomous district shall have the power to levy and collect all or any of the following taxes within such district, that is to say (c) taxes on the entry of goods into a market for sale therein, and tolls on passe

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published in the newspapers and advertisements broadcast radio or television. 62. Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling. Amended Schedule: List I- Union List 84. Duties of excise on tobacco and other goods manufactured or produced in India except (a) alcoholic liquors for human consumption (b) opium Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this entry. Duties of excise on the following goods manufactured or produced in India, namely:- (a) petroleum crude; (h) high speed diesel; (c) motor spirit (commonly known as petrol); (d) natural gas; (e) aviation turbine fuel: and (f) tobacco and tobacco products. : 92. Taxes on the sale or purchase of newspapers and on advertisements published therein . 92C. Taxes on services. List II State List

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of goods to States for two years or such other period recommended by the Council 18. (1) An additional tax on supply of goods, not exceeding one per cent. in the course of inter-State trade or commerce shall, notwithstanding anything contained in clause (I) of article 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 clause (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 clause (1). (4) Parliament may, by law, formulate the princ

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y, difficulty arises in giving effect to the provisions of the Constitution as amended by this Act (including 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. – – Scholarly articles for knowledge sharing authors experts professionals Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.

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Dated:- 22-12-2014 – The Union Finance Minister, Shri Arun Jaitley said that Goods and Services Tax (GST) will benefit most of the States from day one especially the consumer States. He said that to remove any apprehension among the States about the fall in their revenue collections, provisions have been made in the Constitution Amendment Bill on GST introduced by him in the Lok Sabha on the last Friday, 19th December, 2014 to ensure that none of them lose any revenue after the implementation of the GST. In this regard he mentioned that it is proposed to levy a non-vatable additional tax of not more than 1% on supply of goods in the course of inter-State trade or commerce. The Finance Minister said that this tax will be for a period not ex

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ntary Consultative Committee attached to his Ministry. The Finance Minister Shri Jaitley briefed the members about the series of meetings held by him with the Empowered Group of State Finance Ministers wherein concerns of the various States were addressed. The Finance Minister said that as the volume of trade expands and the growth momentum picks-up, then every State will be benefitted with the rise in their revenue collections with the implementation of GST. Members of the Committee also gave various suggestions with regard to GST. Most of the Members of the Consultative Committee supported the decision of the Government to implement the GST and said that this will help in better tax collections, better tax compliance, less cases of tax ev

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with GST and how Revenue Neutral Rates (RNR) are going to be worked-out among others. Replying to the various queries of the Members, the Finance Minister Shri Jaitley said that GST will help in reducing tax on tax and therefore, will be beneficial to the consumers. Besides it, GST will also be beneficial to the Centre, States and industrialists, manufacturers, common man and the country at large since it will being more transparency, better compliance, increase in GDP growth and the revenue collections of both States and the Centre. He said that the Government is open for any suggestion for making further improvement(s) in the GST Constitutional Amendment Bill introduced by him in the current Session of Parliament. He said that GST is a co

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Allied Laws – Finance Minister tabled the Constitution Amendment Bill in the Lok Sabha today with respect to Goods and Services Tax – TMI Updates – Highlights

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Dated:- 19-12-2014 – Finance Minister tabled the Constitution Amendment Bill in the Lok Sabha today with respect to Goods and Services Tax The Union Cabinet approved on 17th December,2014 the proposal for introduction of a Bill in the Parliament for amending the Constitution of India to facilitate the introduction of Goods and Services Tax (GST) in the country. The Union Finance Minister Shri Arun Jaitley introduced the said Bill in the Lok Sabha today. 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. GST will simplify and harmonise the indirect tax regime in the country. GST 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 woul

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nder the Constitution. • 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, i.e., 100% for first three years, 75% in the fourth year and 50% in the fifth year). The proposed GST has been designed keeping in mind the federal structure enshrined in the Constitution and will have the following important features: • Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. • At the State level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST. • All goods and services, except alcoholic liquor for human consumption, will be brought under the purview of GST. Petroleum

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on-based tax. All SGST on the final product will ordinarily accrue to the consuming State. • GST rates will be uniform across the country. However, to give some fiscal autonomy to the States and Centre, there will a provision of a narrow tax band over and above the floor rates of CGST and SGST. • It is proposed to levy a non-vatable additional tax of not more than 1% on supply of goods in the course of inter-State trade or commerce. This tax will be for a period not exceeding 2 years, or further such period as recommended by the GST Council. This additional tax on supply of goods shall be assigned to the States from where such supplies originate. AS INTRODUCED IN LOK SABHA Bill No. 192 of 2014* 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-fifth Year of the Republic of India as follows:- Short title and commencement. 1. (1) This Act may be called the Constitutio

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trade or commerce. Explanation.-The provisions of this article, shall, in respect of goods and services tax referred to in clause (5), of article 279A, take effect from the date recommended by the Goods and Services Tax Council. . 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, 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

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ds, or of services, or both in the course of import into the territory of India shall be deemed to be supply of goods, or of services, or both in the course of inter-State trade or commerce. (2) Parliament may, by law, formulate the principles for determining the place of supply, and 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 Contitution,- (i) in clause (1), for the words, figures and letter articles 268, 268A and article 269 , the words, figures and letter articles 268, 269 and article 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

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d to in sub-clause (c) of clause (2) shall, as soon as may be, choose one amongst themselves to be the Vice-Chairperson of the Council for such period as they may decide. (4) The Goods and Services Tax Council shall make recommendations to the Union and the States on- (a) the taxes, cesses and surcharges levied by the Union, 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) 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 provi

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n of the Goods and Services Tax Council shall be taken at a meeting, 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, namely:- (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. (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,-

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8, 269, 269A and article 279A includes a Union territory with Legislature; . Amendment of article 368. 15. In article 368 of the Constitution, in clause (2), in the proviso, in clause (a), for the words and figures article 162 or article 241 , the words, figures and letter article 162, article 241 or article 279A shall 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

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her period recommended by the Council. 18. (1) An additional tax on supply of goods, not exceeding one per cent. in the course of inter-State trade or commerce shall, notwithstanding anything contained in clause (1) of article 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 clause (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 clause (1). (4) Parliament may, by law, formulate the principles for determining the place of origin from where supply of go

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to the provisions of the Constitution as amended by this Act (including 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

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al Surcharges and Cesses so far as they relate to the supply of 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 good

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ted by each State Government. It is further provided 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

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cle 274, 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

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