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GST constitutional amendment Bill/Act

GST constitutional amendment Bill/Act

GST constitutional amendment: The 120 Amendment Bill of the Constitution of India, known as The Constitution (101 Amendment) Act, 2016,

GST constitutional amendment

GST constitutional amendment

It introduced a national Goods and Services Tax in India from 1 July 2017.

GST is a (VAT) proposed to be a comprehensive indirect tax levy on:-

  • manufacture,
  • sale,
  • consumption of goods,
  • services at the national level.

It will replace all indirect taxes levied on goods and services by the Indian Central and state governments.

It is aimed at being comprehensive for most goods and services.

GST constitutional amendment bill Highlights

GST constitutional amendment: The details covered in this article are as follows

  • About GST constitutional amendment 
  • Discuss GST constitutional amendment bill
  • Discuss Salient features of GST constitutional amendment bill
  • why GST needs a constitutional amendment?

GST constitutional amendment

GST constitutional amendment:  The GST Constitutional (122nd Amendment) Bill’ 2014 became the GST Constitutional (101st Amendment) Act’ 2016 when the president asserted the provisions of the bill on 8th Sept’ 2016.

GST constitutional amendment

  • On 29 March 2017, CGST, IGST, UTGST and GST compensation law passed in Loksabha.
  • The Constitution (120th Amendment) Bill, 2014 was introduced in Lok Sabha by Finance Minister Arun Jaitley on 19 December 2014.
    It has passed by the House on 6 May 2015.
  • In the Rajya Sabha, the bill was referred to a Select Committee on 14 May 2015. The Select Committee of the Rajya Sabha submitted its report on the bill on 22 July 2015. The bill was passed by the Rajya Sabha on 3 August 2016, and the amended bill was passed by the Lok Sabha on 8 August 2016.
  • The bill, after ratification by the States, received assent from President Pranab Mukherjee on 8 September 2016.
    It was notified in The Gazette of India on the same date.

Salient features of GST constitutional amendment bill

GST constitutional amendment:  Following are the salient features of the GST Constitutional Amendment Bill:-

  • Insertion of new Article 246A conferring simultaneous power to the Union and the State legislatures to legislate on GST.
  • Insertion of new Article 279A for the creation of a Goods & Services Tax Council, which will be a joint forum of the Centre and the States. This Council would function under the Chairmanship of the Union Finance Minister.
  • To do away with the concept of ‘declared goods of special importance’ under the Constitution.
  • Central Taxes like Central Excise Duty, Extra Excise Duties, Service Tax, Extra Customs Duty (CVD) and Special Extra Duty of Customs (SAD), etc. will be subsumed in GST.
  • At the State level, Taxes like VAT/ Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Buy Tax and Luxury Tax, etc. would be subsumed in GST.
  • The Centre will compensate States for loss of revenue arising on account of implementation of the GST for a period up to five years (The compensation will be on a tapering basis, i.e., 100% for first three years, 75% in the fourth year and 50% in the fifth year).
  • All Goods and services, except alcoholic liquor for human consumption, will be brought under the purview of GST. But, it has also been if petroleum and petroleum products will not be subject to the levy of GST till notified at a future date on the recommendation of the GST Council. The present taxes levied by the States and the Centre on petroleum and petroleum products, i.e., Sales Tax/VAT, CST and Excise duty only, will continue to be levied in the interim period.
  • Both Centre and States will levy GST across the value chain. The Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State.
  • The Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of Goods and Services. There will be a seamless flow of input tax credit from one State to another. Proceeds of IGST will be apportioned among the States.
  • GST is a destination-based tax. All SGST on the final product will gain to the consuming State.
  • GST rates will be uniform across the Country. But, to give some fiscal autonomy to the Centre and States, there will a provision of a narrow tax band over and above the floor rates of CGST and SGST.
  • It is proposed to levy a non-vatable Extra Tax of not more than 1% on the supply of goods in the course of inter-State trade or commerce for a period not exceeding 2 years or further such period as recommended by the GST Council. This Extra Tax on the supply of goods will be assigned to the States from where such supplies originate.
  • The term “Services” is proposed to be defined as “anything other than goods”.

why GST needs a constitutional amendment?

GST constitutional amendment:  The Constitution provides for delineation of power to tax between the Centre and States. While the Centre is empowered to tax services and goods up to the production stage, the States have the power to tax sale of goods. The States do not have the powers to levy a tax on supply of services while the Centre does not have the power to levy the tax on the sale of goods. Thus, the Constitution does not vest express power either in the Central or State Government to levy a tax on the ‘supply of goods and services’. Moreover, the Constitution also does not empower the States to impose the tax on imports. So, must have Constitutional Amendments for empowering the Centre to levy tax on the sale of goods and States for levy of service tax and tax on imports and other consequential issues.

As part of the exercise on Constitutional Amendment, there would be a special attention to the formulation of a mechanism for upholding the need for a harmonious structure for GST along with the concern for the powers of the Centre and the States in a federal structure.

Read More on GST constitutional amendment Bill in below PDF

A Brief On Gst Bill

Best Recommended Articles on GST

Conclusion GST constitutional amendment 

GST constitutional amendment: In this article, we discussed all information about GST constitutional amendment, the points are –

  • About GST constitutional amendment
  • Discuss GST constitutional amendment bill
  • Discuss Salient features of GST constitutional amendment bill
  • why GST needs a constitutional amendment?

Hope you found the article useful. Please feel free to ask anything or give your comments using the comment box below.

  1. Childit says:

    My firm in Mumbai has a Tug (registered in Mumbai) but plying in Gujrat + the firm also provides services to foreign ships coming to India for which foreign co. pays to them in Fgn Exchange – Their total turnover (for both activities) is app. Rs.70 Lakhs – will they come in Composition scheme – if yes what GST to be paid?? – If not what cgst sgst or igst to be paid ?? Arun

  2. Thank you for this beautiful reminder!

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