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The Constitution Amendment Bill to enable implementation of the Goods & Services Tax regime will not be sent to the Standing Committee on Finance.
“Since the Standing Committee in the previous Lok Sabha did do a detailed study of the Bill and gave recommendations, there is no need to refer it again,” a senior Government official said.
This means the Bill could be directly taken up for consideration and passage in the next session of Parliament. Once the Bill gets the nod from both the Houses, then it will require approvals by 50 per cent of State Assemblies . The Government introduced the Bill in the Lok Sabha on Friday last. The Bill is the first legislative step towards implementation of the new indirect tax reforms from April 1, 2016.
Meanwhile, Finance Minister Arun Jaitley said the new tax regime will benefit most of the States, especially the consuming States, as soon as it is implemented. The new system intends to subsume various Central levies (barring Customs duty) into Central GST (CGST) and State levies into State GST (SGST). This will help in creating a unified national market.
The Bill, once enacted, will confer concurrent power on the Centre as well as States and Union Territories, with State Assemblies allowed to make laws for levying goods and services tax on every transaction related to the supply of goods or services, or both (except those that fall in exempted category and alcohol).
The source also clarified the transitional provision as proposed in the Bill.
It proposes that any law relating to tax on goods or services, or both, in force in any State immediately before the commencement of this Act which is inconsistent with the provisions of the Constitution Amendment Bill will continue to be in force until amended or repealed by the legislature. This gave an impression that both the old and the proposed tax provisions will be in force for one year. But the source rejected this explanation, saying that only the old provision will be in force for the time being.
Consultative CommitteeMeanwhile, the Consultative Committee discussed the broad contours of the Bill on Monday. Jaitley assured the Committee that the Bill envisages compensation for States through monetary provision and additional one per cent tax for two years.
He also said that as the volume of trade expands and the growth momentum picks up, every State will be benefited with a rise in revenue collections with the implementation of GST.
Most of the members of the Consultative Committee supported the Government’s decision to implement the GST and said this would help in better tax collections, better tax compliance, fewer cases of tax evasion and litigation, more transparency and less harassment and corruption.
They said that the number of Departments will also reduce in due course, which, in turn, will lead to lower levels of corruption.
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