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Lok Sabha passes GST Bill 2014

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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.