India has achieved a significant milestone with the passing of
the Constitutional (122nd Amendment) Bill, 2014 for GST (GST Bill)
on 3 August 2016. The GST Bill seeks to empower the Centre and
States to concurrently levy tax on supply of goods and
The GST Bill had been passed by the Lower House in May 2015 and
was stalled at the Upper House due to lack of political consensus.
The Government worked relentlessly towards bringing consensus
across the political spectrum. After deletion of the 1% additional
tax on all inter-state supply of goods that was proposed in the
original GST Bill passed by the Lower House, the Upper House
approved the GST Bill unanimously. Other significant amendments
relate to compensation to States and the dispute resolution
GST will create one single unified market by subsuming most of
the indirect taxes, currently levied by both Centre and State,
which resulted in a fragmented Indian economy. It will facilitate
seamless transfer of goods and services across the supply chain in
one of the largest markets in the world, comprising one-sixth of
the world's population.
The Government has already released the 'Model GST Law',
which contains comprehensive provisions with respect to the Central
/ State Goods and Services Tax (CGST / SGST) and the Integrated
Goods and Services Tax (IGST), for public comments in June 2016.
The Model GST Law is expected to evolve in several areas in the
coming months' after consensus amongst various
GST implementation in India: Next Steps
Approval of the amended GST Bill by
the Lower House
Ratification of the GST Bill by
minimum 50% state legislatures before Presidential assent
Setting up of GST council,
inter-alia, for framing the CGST / SGST law along with
IGST law on inter-state supplies and prescribing the GST rates
Passage of GST law by Parliament and
State legislatures by year end (2016)
With the aim to achieve the expected GST roll out date of 1
April 2017, the Government of India will now strive to expedite the
finalisation of GST law along with its procedural and
administrative aspects. The much awaited step in the right
direction has been taken with the passing ofGST Bill, which will
pave way for the implementation of this all important
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