Background
When the Finance Minister presented the Interim Budget last year, he held out hope for an agreement between the Centre and States on the open issues, such as compensation for CST and under GST, and loss of autonomy in matters of taxation. There were some open points, including the tax treatment of petroleum, and about which taxes would be subsumed into the GST.
122nd Constitution Amendment Bill
The 122nd Constitution Amendment Bill, which was tabled in December, provides answers to some of the key questions relating to the structure of India's GST. The Bill proposes to confer concurrent taxing powers to the Union and the States, to replace the present mutually exclusive but cascading structure wherein the Centre taxes the manufacture of goods and provision of services, and the States tax sales, including deemed sales, of goods, and collect an assortment of taxes such as entertainment tax, excise duties on alcoholic beverages and on medicinal and toilet preparations, and entry taxes. The table below encapsulates the emerging position on which taxes will be subsumed into the GST structure and which products will be subject to differential tax treatment.
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Originally published March 2015
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