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Cabinet approves Goods and Services Tax (GST) Bill

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The Union Cabinet approved the Constitutional amendment Bill for the roll out of the Goods and Services Tax (GST), a crucial step before its likely introduction in the current session of Parliament. The government hopes to roll out GST on April 1, 2016, replacing a range of indirect taxes levied by the centre, states and local bodies with one unifying levy.

It will also include petroleum products though initially the rate of taxation will be zero. Entry tax, too, will be part of the amendment bill, a source said.

States, which earn over 50 per cent of their revenues from taxes on petrol and other fuel products, wanted it to be out of GST so they could continue levying different tax rates on these products.

Alcohol will, however, be exempt from GST and states would have the freedom to decide their own levy.

The Constitution amendment Bill for GST was originally introduced in the Lok Sabha in March 2011 by the UPA government and was also examined by the Parliamentary Standing Committee on Finance.