` The Introduction of Goods and Service tax (GST) is a significant step in Indian economic. GST is a self-regulating tax system with common national interest. Aim of GST is to regularises indirect tax collected in India by combining a large number of central and state tax into single tax. GST rectify the double taxation problem and paves way for common national market. Introduction of GST would also make Indian products competitive in the domestic and international markets owing to the full neutralization of input taxes across the value chain of production and distribution. The reports indicated that this would have a boosting impact on economic growth. Because of its transparent nature and self policing character, would be easier to administer. It would also encourage a shift from the informal to formal economy in India
INTRODUCTION
The ideas of GST was first structed in the prime ministership of Shri Atal Bihari Vajpayee and his economic advisory panel which consists of former RBI governors. On 28th February 2006, the union Finance minster in his Budget for 2006-07 proposed that GST would be introduced from 1st April 2010. Shri Atal Bihari Vajpayee formed the committee headed by then finance minister Asim Dasgupta. Their committee was requested to form structure and roadmap for the GST. Joint working groups of officials having representatives of the state as well as centre were setup to examine various aspects of GST and draw up reports specifically on exemptions and thresholds, taxation of services and taxation of inter-state supplies. The committee released its First Discussion Paper (FDP) on GST in November 2009. The FDP spelled out the features of the proposed GST and has formed the basis for the present GST law and rules.
FORMATION OF GST
In March 2011, 115th Constitutional Amendment Bill,2011 was introduced in the Lok Sabha to enable levy of GST, However, due to lack of political consensus, the Bill lapsed after the dissolution of 15th Lok Sabha in August 2013.
On 19th December 2014, 122nd Constitutional Amendment Bill was introduced in the Lok Sabha and was passed by Lok Sabha in May 2015. The bill was taken up in Rajya Sabha and was referred to the joint committee of the Raj Sabha and the Lok Sabha on 14th May 2015. The committee has submitted its report on 22nd July 2015. Thereafter, the Constitutional Amendment Bill was moved on 1st August 2016 based on political consensus. The Bill was passed by the Raj Sabha on 3rd August 2016 and by the Lok Sabha on 8th August 2016. After ratification by required number of State legislatures and assent of the president. Then by 101st Constitutional Amendment Act (CAA),2016 on 8th September 2016, GST was introduced in India and Council of GST was also formed which was headed by Union finance minister. GST Council comprises of the Union Finance Minister, the Minister of State(Revenue) and the State Finance Ministers to recommend on the GST rate, exemption and thresholds, taxes to be subsumed and other matters. One-half of the total number of members of GSTC form quorum in meetings of GSTC. Decision in GSTC are taken by a majority of not less than three-fourth of weighted votes cast. Centre has one-third weightage of the total votes cast and all the states taken by a majority of not less than three-fourth of weighted votes cast. All decisions taken by GST council has been arrived at consensus. The option of exercising a vote has not been resorted to till date.
After GST Council approved the Central Goods and Services Tax Bill 2017 ( The CGST Bill), the Integrated Goods and Services Tax Bill 2017 ( The IGST Bill), the Union Territory Goods and Services Tax Bill ( The UGST Bill), the Goods and Services Tax ( Compensation to the States) Bill 2017 ( The Compensation Bill), these Bills were passed by the Lok Sabha on 29th March 2017. The Rajya Sabha passed these Bills on 6th April 2017
Prominent features of GST
- GST is based on the principle of destination based consumption taxation as against current principle of origin based taxation
- GST is applicable on ‘supply’ of goods or services as against the present concept on the manufacture of goods or on sale of goods or on provision of services.
- Import of goods or services would be treated as inter-state supplies and would be subject to IGST in addition to the applicable customs duties.
- An Integrated GST (IGST) would be levied an inter-state supply (including stock transfers) of goods or services. This 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 recommendation of the GST Council.
- It is a dual GST with the Centre and the States simultaneously levying tax on a common base. GST to be levied by the Centre would be called Central GST(CGST) and that to be levied by the States would be called State GST (SGST).
