Economy

Goods and Services Tax’s 17-year roller coaster ride to climax

A vendor selling the foodgrains on the eve of GST launch, in Hyderabad on Friday.

A vendor selling the foodgrains on the eve of GST launch, in Hyderabad on Friday.   | Photo Credit: G. Ramakrishna

Here is a look at the timeline that shaped ‘one nation, one tax’ system.

After 17 tumultuous years, the Goods and Services Tax (GST) will roll out from the midnight of June 30, overhauling the country's convoluted indirect taxation system and unifying the USD 2 trillion economy with 1.3 billion people into a single market.

The GST, which will replace more than a dozen Central and State levies like factory-gate, excise duty, service tax and local sales tax or VAT, is the nation's biggest tax reform in the 70 years of Independence and will help modernise Asia’s third largest economy.

Here is a look at the timelines that shaped the ‘one nation, one tax’ system:

* February 1986: Union Finance Minister Vishwanath Pratap Singh proposes a major overhaul of the excise taxation structure in the budget for 1986-87.

* 2000: Prime Minister Atal Bihari Vajpyee introduces the concept, sets up a committee headed by then West Bengal Finance Minister Asim Dasgupta to design a GST model.

* 2003: The Vajpayee government forms a task force under Vijay Kelkar to recommend tax reforms.

* 2004: Vijay Kelkar, then advisor to the Finance Ministry, recommends the GST to replace the existing tax regime.

* February 28, 2006: The GST appears in the Budget speech for the first time; Union Finance Minister P Chidambaram sets an ambitious April 1, 2010 as deadline for the GST implementation. He says the Empowered Committee of Finance Ministers will prepare a road map for the GST.

* 2008: Empowered Committee of State Finance Ministers constituted.

* April 30, 2008: The committee submits a report titled ‘A Model and Roadmap Goods and Services Tax (GST) in India’ to the government

* November 10, 2009: The committee submits a discussion paper in the public domain on the GST welcoming a debate.

* 2009: Finance Minister Pranab Mukherjee announces the basic structure of GST as designed by Dasgupta committee; retains 2010 deadline.

* BJP opposes GST basic structure.

* February 2010: Finance Ministry starts mission-mode computerisation of commercial taxes in the States, to lay the foundation for the GST rollout.

* Pranab Mukherjee defers the GST to April 1, 2011.

* March 22, 2011: UPA-II tables 115th Constitution Amendment Bill in the Lok Sabha for bringing the GST.

* March 29, 2011: The GST Bill referred to the Parliamentary Standing Committee on Finance led by Yashwant Sinha.

* Asim Dasgupta resigns, replaced by then Kerala Finance Minister KM Mani.

* November 2012: Union Finance Minister P Chidambaram holds meetings with State Finance Ministers; decides to resolve all issues by December 31, 2012 for the GST rollout.

* February 2013: Declaring the UPA government’s resolve to introducing the GST, Mr. Chidambaram, in his Budget speech, makes provision for Rs 9,000 crore to compensate the States for the losses incurred because of the GST.

* August 2013: Parliamentary standing committee submits report to Parliament suggesting improvements on the GST. The Bill gets ready for introduction in Parliament.

* October 2013: Gujarat Chief Minister Narnedra Modi opposes the GST Bill, saying the State would incur losses worth Rs 14,000 crore every year due to GST.

* 2014: Bill cleared by the Standing Committee lapses as the Lok Sabha is dissolved; the BJP-led NDA government comes to power.

* December 18, 2014: Cabinet gives the approval for the Constitution Amendment Bill (122nd) for the GST.

* December 19, 2014: Union Finance Minister Arun Jaitley introduces the Constitution Amendment Bill for the GST.

* May 6, 2015: The Lok Sabha passes the Constitution Amendment Bill for the GST.

* May 12, 2015: The Constitution Amendment Bill is introduced in the Rajya Sabha.

* August 3, 2016: The Rajya Sabha passes the Constitution Amendment Bill by two-thirds majority after more than a year.

* September 8, 2016: President signs the Bill and it becomes law.

* September 12, 2016: The GST Council, decision-maker of all GST matters, is constituted.

* September 22-23, 2016: First GST Council meeting takes place.

* November 3, 2016: The Council agrees on four rate slabs — 5%, 12%, 18%, and 28%.

* December 3, 2016: The Council fails to reach consensus on key issues like dual control.

* December 12, 2016: Still no consensus but the Union Finance Minister reiterates April 1, 2017 as rollout date.

* December 23, 2016: The Council decides that the States will get compensated for 100% loss for 5 years

* January 16, 2017: The Council agrees on contentious issues of dual control & rights of goods through high seas; the Finance Minister announces new GST deadline of July 1, 2017.

* February 18, 2017: The Council finalises draft of compensation bill.

* March 4, 2017: The Council approves the CGST and the IGST Bills.

* March 16, 2017: The SGST and the UT GST Bills approved by the Council.

* March 20, 2017: The Cabinet approves the CGST, IGST, the UT GST and Compensation Bills; SGST Bills to be passed by State Cabinets and Assemblies.

* March 27, 2017: Mr. Jaitley tables the CGST, IGST, UT GST and Compensation Bills in the Lok Sabha.

* March 29, 2017: All four GST Bills are passed by the Lok Sabha.

* May 18, 2017: The GST Council sets rates on all eligible goods except six, and set compensation cess for luxury and sin items.

* May 19, 2017: The Council sets rates on almost all services.

* June 11, 2017: The Council amends rate on 66 items; increases limit for composition scheme for small businesses.

* June 21, 2017: All the States, except Jammu and Kashmir, pass State GST legislation.

* June 30, 2017: J&K all-party meeting fails to reach consensus on the GST

(With inputs from PTI)

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Printable version | Jun 1, 2020 4:01:32 AM | https://www.thehindu.com/business/Economy/midnight-launch-of-goods-and-services-tax-gsts-17-year-roller-coaster-ride-to-climax/article19186349.ece

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