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GST BILL -THE CONSTITUTION (122ND Amendment
Bill),2014

• BY CA SRINIVASAN ANAND G

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GST BILL

• GST Bill is a misnomer for this Bill.
• This Bill does not propose to introduce a law to
  levy GST.
• This Bill proposes to amend the Constitution to
• confer concurrent taxing powers on Centre the
  States to make laws to levy GST
• GST will come into force only when
• this Bill is passed to and
• under amended Constitution the Centre states
  make laws imposing GST

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Definition of Services

• Services defined by proposed new clause (26A)
  to be inserted into Article 366
• Services means anything other than goods

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Features of GST

• One indirect tax (GST) to replace a number of
  Central and state indirect taxes levied at
  present
• Intention is to remove cascading effect of
  multiple indirect taxes
• Proposed GST aims at creating a common national
  market for goods and services
• Concurrent taxing powers to Centre States to
  make laws for levying GST
• GST to cover all goods/services except alcoholic
  liquor for human consumption

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Central Indirect Taxes that GST will replace

• Central Excise Duty
• Additional Excise Duties
• Excise Duty levied under Medicinal and Toilet
  Preparations (Excise Duties) Act,1955
• Service Tax
• Additional Customs Duty (Countervailing Duty)
• Special Additional Duty of Customs
• Central surcharges and cesses relating to supply
  of goods and services
• CST

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State taxes that proposed GST will replace

• State VAT/sales tax
• Entertainment Tax (other than the taxes levied by
  local bodies)
• CST (levied by the Centre collected by States)
• Octroi
• Entry Tax
• Purchase Tax
• Luxury Tax
• Taxes on lottery, betting and gambling
• State surcharges cesses relating to supply of
  goods services

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Will Central Excise Duty/State VAT go on
introduction of GST?

• Yes. CED to go on all goods except petroleum
  petroleum products and tobacco and tobacco
  products .Power of Centre under Entry 84 to
  impose CED to be limited to these products.
• State VAT to go all goods except petroleum
  petroleum products alcoholic liquor for human
  consumption. Power of States under Entry 54 to
  impose VAT to be limited to these products.
• Petroleum petroleum products will not come
  under GST net till a date notified on the
  recommendation of the GST Council. Presumably,
  CED/State VAT to apply on these till then.

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Will Service tax go on introduction of GST ?

• Service Tax (presently imposed by Centre) will go
• Entry 92C Tax on Services in Union List ie List
  I of Seventh Schedule proposed to be omitted
• All services will be under the GST net

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Objects of the Constitution (122nd Amdt) Bill

• subsuming of various Central indirect taxes and
  levies into GST
• subsuming of State indirect taxes into GST
• dispensing with the concept of declared goods
• levy of Integrated GST on inter-State
  transactions of goods services
• levy of an additional tax on supply of goods, not
  exceeding 1,in the course of inter-State trade
  or commerce to be collected by the Govt of India
  for a period of two years, and assigned to the
  States from where the supply originates
• compensation to the States for loss of revenue on
  account of GST for a period upto 5 years
• creation of GST Council to examine issues
  relating to GST and make recommendations to the
  Union the States on parameters like rates, model
  GST laws, exemption list threshold limits