Union Finance Minister Arun Jaitley will seek the Cabinet’s nod on Wednesday for the 122nd Constitutional Amendment Bill on the Goods and Services Tax.
The GST will subsume into one levy all indirect taxes imposed by the Centre and the States. These include entry tax. The Minister also proposes to extend the GST to all petroleum products and real estate transactions.
At its last meeting on Thursday, the Empowered Committee of State Finance Ministers had by consensus rejected the Centre’s draft Constitutional Amendment Bill and its proposal to bring petroleum goods and entry tax within the GST ambit. The States have consistently demanded that the GST regime exclude real estate transactions and stamp duties.
On these issues, the Finance Ministry’s new draft Bill does not reflect the Empowered Committee’s position. The Ministry has, however, inserted into its draft Bill a provision guaranteeing compensation to States for losses of revenues owing to the transition to the GST. Now, it is proposed that the Constitution itself will provide that the Centre transfer funds to States to make good their losses of revenue owing to the shift to the GST over the first five years of the transition.
