Union Government introduced the
Constitution (122nd Amendment) Bill, 2014 in the Lok Sabha on 19 December 2014.
The introduction of this Bill will facilitate the introduction of the Goods and
Services Tax (GST) regime in India.
The 122nd Constitution Amendment
Bill seeks to inserts Article 246A, 269A, Article 279A and omits Article 268A
which was inserted by the Constitution (88th Amendment) Act, 2003. It also
omits Entry 92 and 92C from the Union List and Entry 52 and 55 of the State
List of the Seventh Schedule
Besides, it amends Article 248, 249,
250, 268, 269, 270, 271, 286, 366, 368, Sixth Schedule and the Entry 84 of the
Union List and Entry 54 and 62 of the State List of Seventh Schedule of the
Constitution.
Article 246A: Empowers Legislature of every State to make laws with
respect to goods and services tax imposed by the Union or by such State
provided that these powers are subject to laws made by Parliament in accordance
with the Article 246A (2).
Article 246A (2): Parliament has the exclusive power to make laws with respect
to GST where the supply of goods, or of services, or both take place in the
course of Inter-State trade or commerce.
Article 269A: Provides that GST on supplies of the good and services
taking place in the coruse of inter-state trade will be levied and collected by
the Union and apportioned between the Union and the States in the manner
provided by the Parliament by law on the recommendations of the GST Council.
Article 279A: Empowers President of India to constitute a Goods and
Service Tax (GST) Council within sixty-days of the commencement of the 122nd
Constitution Amendment Act.
Main Provision of the Bill
- It provides for constitution of a Goods and Services
Tax (GST) Council to recommend to the Union and States on the inclusion
and exclusion of goods and services
- It brings petroleum crude, high speed diesel, motor
spirit, natural gas, aviation turbine fuel and tobacco and tobacco
products within the purview of Union List and State list.
- It proposes an additional tax on supply of goods, not
exceeding one percent, in the course of inter-State trade will be levied
and collected by the Union for a period of two years and apportioned to
the States
- The net proceeds of additional tax on supply of goods,
except the proceeds from Union Territories, will not form the part of
Consolidated Fund of India and shall be deemed to have been apportioned to
States from where the supply originates.
- It proposes that Parliament by Law on the
recommendation of the GST Council provide for the compensation to the
States for loss of revenue arising on account of implementation of GST for
a period of five years.
- It subsumes all the Central indirect taxes, levies and
Central Sales Tax and State Value Added Tax and Sales Tax
- It dispenses with the concept of declared goods of
special importance under the Constitution
- It covers all goods and services except alcoholic
liquor for human consumption for the levy of GST.
- In case of petroleum products, these goods will not be
subjected to GST till a date is notified on the recommendation of the GST
Council
About Goods and Services Tax (GST)
Council
1.The GST Council comprises of
following members
- Union Finance Minister: Chairperson
- Union Minister of State in charge of Revenue or
Finance: Member
- Minister in charge of Finance ot Taxation or any other
Minister nominated by each State government: Members
2.The GST Council should choose one
amongst them to be the Vice-Chairperson of the Council for such period as they
may decide.
3.Functions of GST Council
- To make recommendations to Union and State on the
taxes, cesses and surcharges levied by Union, State or local bodies that
can be subsumed in the GST
- To make recommendations on goods and services that may
be subjected to, or exempted from the GST
- To propose a model GST Laws, principles of levy,
apportionment of Integrated GST and the principles that govern the place
of supply
- Recommend the threshold limit of turnover below which
goods and services amy be exempted from GST
- Recommend the rate including floor rates with bands of
GST
- Recommend any special rate or rates for a specified
period to raise additional resources during any natural calamity or
disaster
- Recommend special provisions with respect to the States
of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya,
Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand
4.Every decision of the Council
shall be taken by a majority of not less than three-fourth of the weighted
votes of the members present and voting in accordance with the following
principles:
(a) The vote of the Union government
shall have a weightage of one-third of the total votes cast
(b) The votes of all the States
government taken together shall have a weightage of two-third of the
total votes cast in the meeting
5. One half of the total number of
members of the GST Council shall constitute the quorum at its meeting