Analysis on GST Bill No 192 of 2014
- Special Provision in Respect to GST (Article 246A)
- Levy and collection of GST of Inter State Trade and Commerce
- Goods and Service Tax Council
- Amendment of Definition under Article 366
- Arrangement for assignment of additional tax on supply of goods to state
- Restriction as to imposition of tax on the sale or purchase of goods
- Statement of Objects and Reasons
Special Provision in Respect to GST
1. After article 246 of the constitution of India article “246A” has been inserted and subject to clause (2)
1.1 The legislature of every state, have power to make laws with respect to Good and Service Tax imposed by the Union or such State.
Remarks: – In case of Local GST the legislature has power to make law.
1.2 Parliament has exclusive power to make law in respect to goods and service tax where the supply of goods, or of services or both take place in the course of Interstate trade or commerce.
Remarks:- In case of Interstate GST the Parliament has power to make law.
** Effective date will be recommended by Goods and Service Tax (GST) Council
Levy and collection of GST of Inter State Trade and Commerce
- After article 269 of the constitution article 269A has been inserted;2.1 Goods and service tax on supplies in the course of Interstate Trade or commerce shall be levied and collected by the Govt. of India and such tax shall be apportioned between the union and the states in the manner recommended by the GST Council.2.2 The principle for determining the “place of service and the supply” of goods or of service or both take place in the course of interstate trade or commerce may be formulate by the parliament.** Import from outside India shall be treated Interstate Trade or Commerce.
- After clause (1) of article 270 clause (1A) has been inserted;3.1 The goods and service tax levied and collected by the Govt. of India except the tax apportioned with the states under clause (1) of article 269A above, shall also be distributed by the union and manner provided by parliament.** This is an additional contribution to the state government if provided by the parliament.
Goods and Service Tax Council
4. After article 279 article 279A has been inserted;
4.1 The president of India, shall within 60 days of commencement of the constitution (122 Amendment) Act 2014, by order, constitute a council to be called Goods and Service Tax Council.
4.2 GST Council shall constitute the following members,
> union finance minister as chairperson,
> union minister of state in charge of revenue or finance member,
> minister of finance or Taxation by each state govt. as member,
4.3 The GST Council has power to make recommendation to the union or state Govt. on
- the taxes, cesses and surcharge shall be subsumed as levied by union, state or local bodies,
- list of exempted goods or services or both,
- principle that govern the place of supply of good and services,
- the threshold limit of turnover for exemption from applicability
- of Goods and service tax,
- the rate including floor rate,
- any special rate or rates for specified period,
Amendment of Definition under Article 366
5. After clause (12) and (26) of article 366 clause (12A) (26A) and (26B) has been introduced
5.1 Clause (12A) “Goods and Service Tax” means any tax on supply of goods and service tax or both except taxes on the supply of the alcoholic liquor for human consumption.
5.2 Clause (26A) “Services” means anything other than goods.
5.3 Clause (26B) “States” includes a union territory with legislature.
Arrangement for assignment of additional tax on supply of goods to state
6. Arrangement for assignment of additional tax on supply of goods to state;
6.1 An additional tax not exceeding 1% in the course of Interstate trade of commerce shall be levied and collected by Central Government for the period of 2 Years or such other period as the GST Council may recommend.
6.2 A law formulated by the parliament regarding the determination of place of origin from where supply of goods take place in the course of Inter State trade or commerce.
Restriction as to imposition of tax on the sale or purchase of goods
7. Restriction as to imposition of tax on the sale or purchase of goods as per article 286;
7.1 The state government has no power to levy and impose tax on sale or purchase of goods where such sale or Purchase-
(a) Outside the state; or
(b) In the course of import of goods into or export of goods out of the territory of India.
7.2 Parliament has an exclusive power for determining when sale or purchase of goods take place in any of the way mentioned in point number 7.1 above.
7.3 Any law of the state shall, in so far as it imposes or authorises the imposition of,-
(a) a tax on sale or purchase of goods declared by parliament by law to be of special importance in interstate trade or commerce; or
(b) a tax on sale or purchase of goods, being a tax of nature referred to in article 366,
subject to such restrictions and conditions in regards to the system of levy, rates and other incidents of the tax as parliament may specify by law.
Statement of Objects and Reasons
The GST shall replace a number of Indirect Taxes being charged by Union and States Govt. and is intended to remove cascading effect of taxes and provide for a common national market for goods and services.
The proposed bill, seeks further to amend the constitution-
- Subsuming of various “Central IDT” and levies such as Central Excise Duty, Additional Excise Duty levied under the Medicinal and Toilet Preparations Act, 1955, Service Tax, Additional Custom Duty commonly known as countervailing Duty (CVD), Special Additional Duty (SAD) of Custom and Central Surcharges and Cess
- Subsuming of “State VAT/Sales Tax”, Entertainment Tax (Other than tax levied by the local body), Central Sales Tax, Octroi and Entry Tax, Purchase Tax, Luxury Tax, Taxes on lottery, betting and gambling and State cesses and surcharges in so far as they relate to supply of goods and servic
- Dispensing with the concept of declared goods of special importance under constitution.
- Levy of integrated goods and service tax on Interstate transaction of goods and services.
- Additional Tax on supply of goods, not exceeding one percent, in the course of interstate 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.
- In case of petroleum and petroleum products, it has been provided that these goods shall not be subject to the levy of GST.
- Every decision of the Council shall be taken by a majority of not less than three-fourths (3/4) of the weighted votes of the members present and voting in accordance with the following principles:-
> The vote of the Central Govt. shall have a weightage of one- third of the total votes cast, and
> The votes of all the State Govt. taken together shall have a weightage of two-thirds of the total votes cast in that meeting.