The Centre on Tuesday introduced a Constitution Amendment Bill in the Lok Sabha to facilitate implementation of the Goods and Services Tax (GST), a tax regime that would subsume levies such as excise, service tax and sales tax. The Bill, introduced by Finance Minister Pranab Mukherjee, seeks to amend the Constitution with a view to conferring simultaneous powers on the Centre and the States to levy taxes on goods and services.
It will also subsume State VAT/sales tax, entertainment tax (unless levied by the local bodies), luxury tax, taxes on lottery, betting and gambling as also tax on advertisements, cesses and surcharges levied by States. However, crude petroleum, diesel, petrol, aviation turbine fuel, natural gas and alcohol for human consumption have been kept out of the GST ambit.
“The GST would replace a number of indirect taxes now being levied by the Central and State governments and is intended to remove cascading of taxes and provide a common national market for goods and services,'' according to the statement of objects and reasons of the Bill.
The Bill provides for creation of a GST Council to be headed by Union Finance Minister. The council will be empowered to recommend tax rates and exemption and threshold limits for goods and services. Besides, the Bill proposes a GST Dispute Settlement Authority to deal with grievances of the Centre and the States with regard to GST.
The chairperson of the authority will be a retired judge of the Supreme Court or the Chief Justice of a High Court, who would be appointed by the President on the recommendation of the Chief Justice of India. The GST, considered to be a major tax reform, has been pending for the last four years due to disagreement between the Centre and some States over the structure of the new tax regime.
Banking laws
Mr. Mukherjee also introduced the Banking Laws (Amendment) Bill, 2011, that seeks to further amend the Banking Regulation Act, 1949, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act,1980, and to make consequential amendments in certain other enactments.
