The Union Cabinet on Monday approved four crucial GST Bills that will pave the way for the country to usher in its biggest-ever indirect tax reform.
The four Bills that got the Cabinet nod are the Central Goods and Services Tax (CGST) Bill, 2017 (CGST Bill), Integrated Goods and Services Tax Bill, 2017 (iGST Bill), Union Territory Goods and Services Tax Bill, 2017 (UTGST Bill), and Goods and Services Tax (compensation to the States) Bill, 2017 (The Compensation Bill).
They are expected to be tabled in Parliament this week as Money Bills. The government hopes to get them passed in the ongoing session to ensure the tax is implemented from the targeted date of July 1, 2017.
The State GST Bill will be taken up by State Cabinets and introduced in each State Assembly.
Key laws The CGST Bill provides for levy and collection of tax on intra-State supply of goods or services or both by the Central government.
On the other hand, the iGST Bill makes provisions for levy and collection of tax on inter-State supply of goods or services or both by the Central government.
The UTGST Bill makes provisions for levy on collection of tax on intra-UT supply of goods and services in Union Territories without a legislature. The UTGST is akin to the States Goods and Services Tax (SGST), which will be levied and collected by the States/Union Territories on intra-State supply of goods or services or both.
The Compensation Bill provides for compensation to the States for loss of revenue arising on account of implementation of GST, for five years, as per Section 18 of the Constitution (101st amendment) Act, 2016. With the Cabinet approving these four Bills, the GST regime in India is in the final stages of culmination and the GST law will most likely be implemented from July 1, 2017.
The four Bills had earlier been approved by the GST council after clause-by-clause discussions over 12 meetings of the Council held in the last six months.
Amalgamating a large number of Central and State taxes into a single tax will mitigate cascading or double taxation in a major way and pave the way for a common national market, an official release said.
The GST will thus help in the realisation of the ‘One Nation, One Tax’ objective and improve the ease of doing business in the country.
It will also indirectly benefit the common man by reducing the tax burden, especially on daily consumption items, the release said.
Impact on growth Introduction of GST will also make Indian products competitive in the domestic and international markets. Studies show that this would have a major impact on economic growth.
It is expected that the implementation of the GST laws will drive the gross domestic product (GDP) of the country up by 1-2 per cent. This, in turn, will lead to the creation of more employment and increase productivity, the release said.