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Bill to implement GST in winter session: FM
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SME Times News Bureau | 22 Oct, 2014
The constitution amendment bill to implement the Goods and Services Tax
(GST) would be introduced in the forthcoming winter session of
parliament, Finance Minister Arun Jaitley said Tuesday.
He also
said the first tranche of compensation to states for their revenue loss
from the phasing out of Central Sales Tax (CST) may also be taken up in
the coming Session.
âConfident of introducing revised GST
Constitution Amendment Bill in the winter Session. Targeting winter
session for transfer of first tranche of CST compensation,â Jaitley told
reporters here.
The previous UPA government in 2011 introduced a
Constitution Amendment Bill in the Lok Sabha towards the introduction
of the GST.
States have sought a five-year compensation package from the Centre and asked for its inclusion in the Bill.
The
Empowered Committee (EC) of state finance ministers resolved in August
to lower the threshold limit for imposing the proposed GST from Rs.25
lakh (Rs.2.5 million) to Rs.10 lakh (Rs.one million) and asked that
states be given the legal powers to collect tax from businesses with
annual turnover of up to Rs.1.5 crore (Rs.15 million).
As per
their recommendation, GST would not be imposed on businesses with an
annual turnover of less than Rs.10 lakh. Currently, the threshold for
Value Added Tax (VAT) is Rs.10 lakh in most states.
On the vexed
issue of dual control of traders by both the union as well as state
governments, the states recommended that they be given legal powers to
collect tax from businesses with an annual turnover of up to Rs.1.5
crore. Those with below the turnover threshold of Rs.1.5 crore would pay
their taxes to states, which would subsequently pass on to the Centre
its share.
On the items exempted from the purview of GST, the EC suggested these should be mentioned in the constitutional amendment bill.
With
state finance ministers having dropped the issue of compensation in
lieu of a cut in the central sales tax (CST) from the agenda of their
upcoming meeting on implementing the Goods and Services Tax (GST), the
major hurdle appears to have cleared in reforming India's indirect tax
regime.
Seen as a key to facilitating industrial growth and
improving the business climate in the country, the GST Bill needs to be
passed by a two-thirds majority in both houses of parliament and by the
legislatures of half of the 29 states to become law.
CST was one of the major roadblocks for a GST, which was originally scheduled to come into effect from April 1, 2010.
While
CST is levied by the Centre on inter-state movement of goods but is
collected by the states, the issue of compensation arose because the
Centre cut CST from four percent to two percent in phases after
state-level value added tax (VAT) was introduced from April 1, 2005.
By
subsuming most indirect taxes levied by the Centre and the states such
as excise, service tax, VAT and sales tax, GST proposes to facilitate a
common market across the country, leading to economies of scale and
reducing inflation through an efficient supply chain.
The
previous UPA government had introduced a bill in parliament proposing a
GST council and a dispute resolution panel for fixing the rate of the
new tax for both states and the Centre. However, the bill had received
stiff opposition from the states, including the BJP-ruled ones like
Gujarat and Madhya Pradesh.
The finance minister has assured
parliament that the government will seek to move the amendments to the
constitution this year itself for implementing GST, besides already
assuring states that he would clear their CST compensation dues of about
Rs.34,000 crore ($5.5 billion) over a three-year period.
States
like Gujarat, Madhya Pradesh and Uttar Pradesh, which were earlier
standing in the way of GST, have now said they are not opposed to it as
long as their concerns are addressed.
Full implementation of GST
could lift India's gross domestic product (GDP) growth by 0.9-1.7
percentage points, according to a study by the National Council of
Applied Economic Research (NCAER).
The government proposes to implement the GST from April 1, 2016
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G S T proposed by finance minister.
Praveen Kumar | Thu Oct 23 09:59:32 2014
Sir,
It will be a great moment for Indian Industry that G S T will be introduced in India. It is not possible for a small industry to face so many departments, All Indians must thank full to finance minister and respected Prime Minister for the same.
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