Indirect tax reforms in India: A chronology

  • Gaurav Chaudhury, Hindustan Times, New Delhi
  • Updated: Aug 03, 2016 13:25 IST
GST is part of the long line of reforms that indirect taxes have gone through in India. (Livemint)

As the government tables the constitutional amendment bill in Rajya Sabha, to make GST a reality, here’s a look at the chronology of indirect tax reforms in India.

1935 Govt of India Act, 1935 made tax on sales of goods a provincial subject

1939 Sales Tax introduced in India in the State of Madras

1941 Sales tax introduced in the State of Punjab; other states follow in later years

1974 LK Jha Committee suggests introduction of value added tax (VAT) in India

1986 MODVAT or modified VAT, introduced on select commodities

1991 Raja Chelliah Committee recommends VAT

1994 Service tax introduced in India

1999 Centre announces decision to introduce VAT in India.

2002 CENVAT or introduced on all commodities at central level

2003 VAT introduced in first Indian State of Haryana

2005 VAT in 24 States/UTs including Punjab, Chandigarh, HP, J&K and Delhi.

2006 VAT implemented in 5 more States including Rajasthan.

2006- 07 Proposal for GST first mooted in the Budget Speech for the financial year. Negotiation with States started began soon after

2008 Empowered Committee of State Finance Ministers (EC) engaged

2009 EC released its First Discussion Paper

2011 Constitution Amendment Bill on GST introduced

August 2013 Parliamentary Standing Committee submitted its report. Recommendations of Standing Committee incorporated in the Bill

September 2013 Revised Bill sent to EC for consideration

March 2014 Incorporating recommendations of EC another revised Bill sent to EC

December 2014 Constitution Amendment Bill introduced in Lok Sabha

May 5, 2014 Lok Sabha passes GST Bill

May 2015 Lok Sabha passes Constitution Amendment Bill for GST

August 2015 Congress insists on capping GST rate at 18% and specified in the Constitution amendment Bill

July 2016 Centre and states agree against capping GST rate in the Constitution amendment Bill

August 2016 Centre to move modified Constitution Amendment bill in Rajya Sabha

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