One year of GST: A timeline of events which led to the country’s biggest tax reform
The GST regime we see today has evolved over more than a decade of discussion, deliberation and debate. A look through the long journey of GST’s coming into being.Updated: Jul 01, 2018, 11:30 IST
The NDA government’s flagship tax reform, the goods and services tax (GST), was rolled out from July 1 last year with the motto ‘one nation, one tax’. While concerns were raised about the preparedness of taxpayers and the government to usher in a reform as sweeping in nature as GST in July 2017, one year later, the government has said the new regime is stabilising, and tax compliance has increased. Companies have also given the new regime a thumbs up, as the new taxation structure subsumes more than a dozen central and state taxes, making it easier to file tax returns and improve the ease of doing business.
But the GST regime as we see today, has evolved over more than a decade of discussion, deliberation and debate, going all the way back to the year 2004, when then finance minister P Chidambaram’s financial advisor first proposed the dual-GST model.Here’s a look through the long journey of GST’s coming into being.
July 16, 2004: A task force headed by Dr. Vijay Kelkar, advisor to then finance minister P Chidambaran put forward a recommendation on the need for a national GST. In the report, he proposed the dual-GST structure, with a central GST of 12% to replace the central VAT and a standard state GST of 8% to replace VAT levied by states.
February 28, 2006: Finance minister P Chidambaram in his budget speech for the year 2006-7 mentioned the constitution of an empowered committee (EC) of state finance ministers to work with the centre to present a road map for implementing GST in India, beginning April 2010.
November 28, 2006: A report submitted by a working group formed by the empowered committee of state finance ministers was discussed in the EC.
December 12, 2008: The government of India presented its comments on the report of the EC
January 21, 2009: Proposal to set up a committee of principal secretarites, secretaries of finance/taxation and commissioners of trade taxes of the states was accepted, and a working group was formed.
March 2009: A report released by the department of economic affairs, ‘GST Reforms and Intergovernmental Considerations in India’ discussed the need for, and objective of the GST reform. The report considered essential questions on the ‘design and implementation’ of the new reform. “Will it [GST]necessitate a change in the constitutional division of taxation powers between the Centre and the States? Will the taxes imposed by the Centre and the States be harmonized, and, if so, how?’”, it asked.
October 19, 2009: Agreement reached between then finance minister Pranab Mukherjee and the Empowered Committee to phase out the central sales tax (CST)
February 26, 2010: Date of proposed implementation of GST shifted from April 1, 2010 to April 1, 2011. A Technology Advisory Group for Unique Projects (TAGUP) with Nandan Nilekani as chairman proposed.
March 22, 2011: GST Bill (115th Constitutional Amendment Bill, 2011) introduced in the Lok Sabha. The bill give concurrent taxing powers to both the Centre and States, and suggested the creation of A of Goods and Services Tax council and a Goods and Services Tax Dispute Settlement Authority.
March 29, 2011: GST Bill referred to the Standing Committee on Finance (2012-13)
March 28, 2013:The Goods and Services Tax Network (GSTN) was incorporated as a non-profit, private limited company.
May 18, 2014: The GST Bill lapsed with the dissolution of 1the 5th Lok Sabha by President Pranab Mukherjee. The BJP, led by Prime Minister Modi took power the same month.
December 19, 2014: Seven months later, the NDA government’s finance minister Arun Jaitley introduced the Constitution (122nd Amendment) (GST) Bill 2014 in the Lok Sabha
May 6, 2015: Finance minister Jaitley’s 122nd Constitutional Amendment Bill was passed in the Lok Sabha.
September 21, 2015: Government awards Rs 1,380 crore contract to Infosys to build and maintain the technology for implementing GSTN, over five years.
December 4, 2015: Chief Economic Advisor Arvind Subrmanian releases report on the revenue netral rate and structure of rates for GST.
June 14, 2016: The empowered committee of state finance ministers gives its in-principle approval to the Model GST Law.
August 3, 2016: The 122nd Constitutional Amendment Bill, 2014 was unanimously approved by the Rajya Sabha with amendments.
August 8, 2016: Amendments made by Rajya Sabha on August 3 were adopted and the bill was passed again by the Lok Sabha.
August and September 2016: Over the two months, 23 state assemblies had introduced and approved the GST bill.
September 8, 2016: President Pranab Mukherjee gave his approval to the GST bill, notified as the Constitution (One Hundred and First Amendment) Act, 2016. Article 368 of the Indian Constitution mandates that any constitutional amendment needs to be ratified by at-least one-half of the State legislatures, after being passed by both houses of the Parliament, before they can be presented for the President’s assent.
September 12, 2016: Cabinet approves creation of GST Council and its Secretariat.
September 22 and 23, 2016: First GST Council meeting held in New Delhi, in which draft rules of procedures and conduct of business in the council, a timetable for the implementation of GST, thresholds for exemption and composition under GST and draft GST Compensation Law are discussed.
October 18 and 19, 2016: Tax rates under the GST regime are discussed at the 3rd meeting of the GST council.
November 26, 2016: Revised Model GST Law, 2016, draft IGST Law and draft GST Compensation Law released
March 4, 2017: The GST council disses the development of an e-way bill system by the GSTN at its 11th meeting.
March 20, 2017: The Union cabinet chaired by Prime Minister Narendra Modi approves the four GST bills: the CGST Bill, IGST Bill, UTGST Bill and the Compensation Bill.
March 22, 2017: The cabinet approves amendments in the Customs Act, 1962, the Customs Tariff Act, 1975 and the Central Excise Act, 1944 to abolish cesses and surcharges on various goods and services to facilitate implementation of GST.
March 25, 2017: President Pranab Mukherjee gives his nod for the GST bills to be placed before the parliament. The CBEC (Central Board of Excise and Customs) is renamed CBIC (Central Board of Indirect Taxes & Customs)
March 29, 2017: All four GST bills passed as Money Bills in the Lok Sabha.
March 31, 2017: Date for migration of Central Excise & Service Tax to GST extended from 31st March, 2017 to 30th April, 2017.
April 6, 2017: All the four Central GST bills are passed in the Rajya Sabha without amendments. Along with them is passed the Taxation Laws (Amendment) Bill, 2017.
April 12, 2017: With the President’s assent, the four bills now become Acts of Parliament: Central Goods And Services Tax Act, 2017, Integrated Goods And Services Tax Act, 2017, Union Territory Goods And Services Tax Act, 2017, and the Goods And Services Tax (Compensation to States) Act, 2017
May 18 and 19, 2017: At the 14th meeting of the GST Council in Srinagar, the final tax slabs at nil, 5%, 12%, 18% and 28% were announced, fitment of products into these slots was discussed and rates for GST Compensation cess approved.
June 18, 2017: To ease the transition to the new GST regime for the taxpayer, the GST council at its 17th meeting in New Delhi announced for the first two months after GST implementation, the tax would be payable based on a simple return, form GSTR-RB.
June 21, 2017: All states except Jammu and Kashmir pass SGST law.
July 1: GSTis rolled out.
Information sourced from gst.taxmann.com