The Constitution Amendment Bill for Goods and Services Tax (GST) is one of the few political scenario’s that have taken India by ‘wow’ in the recent times.
The bill which was passed recently, (3.08.16 in Rajya Sabha and 8.08.16 in Lok Sabha) is a game changing point for the country’s economy. It creates a common market and will have a huge impact on all the aspects of business in the country.
Originally the idea came up after Atal Bihari Vajpayee’s government set up a committee back in 2000. The GST model was suggested and actions were taken to create the infrastructure required to implement the model.
In 2006, the then Finance Minister, P. Chidambaram announced a date as the target for implementation (1.04.10). Following this announcement, a new committee was formed and its First Discussion Paper was also released in 2009.
In 2014, the Finance Minister Arun Jaitley introduced a bill in the Lok Sabha. The passed bill went on to the Rajya Sabha and was then referred to a Select Committee in 2015. After the submission of the committee’s report, the bill was passed in the Rajya Sabha and the amended bill was again passed in the Lok Sabha.
After its long road, the bill finally received the President’s assent on 8the September 2016 and reached The Gazette of India on the same day.
Essentially, what the Bill proposes is the implementation of a national Value Added Tax (VAT) from 1st April 2017. This ‘Goods and Services Tax’ would be an indirect tax on all the goods and services throughout India, manufacture, sale and consumption. This tax would amalgamate several Central and State taxes and provide the citizens with one single tax, thus making way for a common market in the country.
The Government of India is committed to implementing the GST on the specified date, thus replacing all the indirect taxes levied.
Only time will tell its success story.