Govt Moves GST Bill in Rajya Sabha

Narendra Modi Government finally managed to table the Constitution Amendment Bill for the Goods & Services Tax in the Rajya Sabha. Once passed by the Rajya Sabha, the Bill will go back to the Lok Sabha for approval on amendments.

Jaitley’s remarks while tabling the Bill fuelled the protest by the Congress and compelled Deputy Chairman PJ Kurien to rule that the House could not proceed in the pandemonium and adjourn it for the day.

According to the Rules, such a Bill cannot be voted until the House is in order. A majority of at least 2/3rd of the members ‘present and voting’ is required for the Bill to pass.


The GST (Goods and Services Tax) is a comprehensive tax levy on manufacture, sale and consumption of goods and services at a national level. Through a tax credit mechanism, this tax is collected on value-added goods and services at each stage of sale or purchase in the supply chain.

The system allows the set-off of GST paid on the procurement of goods and services against the GST which is payable on the supply of goods or services. However, the end consumer bears this tax as he is the last person in the supply chain.

Experts say that GST is likely to improve tax collections and boost India’s economic development by breaking tax barriers between States and integrating India through a uniform tax rate.

Envisioned by Kelkar committee to be imposed both by center and states. It will replace 5 indirect taxes: Central excise, cenvat, service tax, State level sales tax, Octroi.

The government aims to implement GST by April 1, 2016 and has been working overtime to get states on board. The Union Cabinet in December 2014 approved the Constitutional Amendment Bill on Goods & Services Tax (GST).

The Bill needs to be approved by a two-third majority of the house. After this, it needs to be endorsed by at least half of the State Assemblies (15). Then the Centre will introduce separate legislation for GST. States, too, will be required to bring in legislations.

The Constitution does not provide for any concurrent taxation powers to the Centre as well as the States. This required the Constitution to be amended for conferring simultaneous power on Parliament as well as the State Legislatures, including every Union Territory with Legislature to make laws for levying goods and services tax on every transaction of supply of goods or services or both.

There will be a Central GST, which will subsume Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (commonly known as Countervailing Duty or CVD), Special Additional Duty of Customs (SAD) and Central Surcharges and cesses.

Then there will be State GST. This will subsume State VAT/Sales Tax, entertainment tax (unless it is levied by the local bodies), Luxury Tax, Taxes on lottery, betting and gambling, tax on advertisements, State Cesses and Surcharges.

The third one will be Integrated GST (IGST) on inter-State transactions of goods and services. There is an agreement on subsuming entry tax in GST. At the same time, petroleum products will be part of GST with ‘nil’ rate.