Cabinet approves GST Bill
The Union Cabinet on Tuesday approved the Constitution Amendment Bill, paving the way for the introduction of the Goods and Services Tax. GST aims to stitch together a common market by dismantling fiscal barriers among states. HT reports. One nation one taxbusiness Updated: Mar 16, 2011 01:30 IST
The Union Cabinet on Tuesday approved the Constitution Amendment Bill, paving the way for the introduction of the Goods and Services Tax (GST). GST aims to stitch together a common market by dismantling fiscal barriers among states.
At present, the Centre and states tax goods independently.
If adopted, GST can dramatically alter tax administration by giving a one-shot solution to levies such as excise, value-added tax and octroi.
The Bill, sources told HT, has diluted the Centre’s earlier position of empowering itself with veto powers to overrule decisions, but has proposed the setting up of a Goods and Services Tax Council (GST Council).
It has also avoided any reference to the earlier proposal of making the finance minister as head of the council.The Union minister of state in charge of revenue and finance ministers of each state will be a member of the council.
"It shall be the duty of the GST council to make recommendations on taxes, cesses, surcharges levied by the Centre, states and local bodies, which shall be subsumed in the Goods and Services Tax," the source said.
This is the fourth draft of the Amendment Bill. State governments had rejected the earlier three drafts fearing loss of discretionary fiscal powers.
In effect, the Council will be the supreme authority on deciding on rates and threshold limit of turnover below which GST shall be exempted.
In addition, the composition of the GST Dispute Resolution Authority, proposed to be a part of the Constitution Amendment, will be decided by Parliament.