Lok Sabha passes GST Bill 2014

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.