On Wednesday, 6th May 2015,Lok Sabha passed the Goods and Services Tax Constitutional Amendment bill. Lok Sabha Speaker Sumithra Mahajan announced that the Bill was approved with two-thirds majority of the house. Finance Minister Mr Arun Jaitley said that the GST will reduce the prices in the long run and boost the economic growth,
- Insertion of Article 279A in the constitution will give the Bill power to Union and State governments to make laws on goods and services taxation.
- The Central and State governments are not interested in imposing higher GST rates that could hurt people.
- The proposed GST would harmonise a mosaic of state and central into a national sales tax, that business and policy makers hope would boost production and reduce corruption.
- Government think-tank proposed a GST rate to be set at 27%, which is above the global average of 16.4%.
- Mr Jaitley said that the rates proposed would be too high and needs to be diluted.
- Exemptions and Exceptions are also worked into the Bill. The tax does not apply to alcohol for ex petroleum products will be taxed seperately .
- Manufacturing states will be allowed to levy an additional tax of 1% on the supply of goods.
- According to Mr Arun Jaitley , the whole country, which is one-sixth of the worlds population would become a single market and therefore would give necessary fillip as far as trade is concerned.
- The constitutional amendment bill was passed by 352 votes as against 37 after the government rejected the opposition demand of referring it to a standing committee.
- The GST Bill, would also give compensation to the states for the loss of revenue due to implementation of GST, this compensation would be there for 5 years.
About Goods and Service Tax Bill
- Goods and Service Tax is Value Added Tax, to be implemented in India on1st April 2016.
- It is proposed to be comprehensive indirect tax levy on manufacture,sale and consumption of goods.
- It would replace all indirect taxes levied on goods and services.