President gives assent to the Constitution (122nd Amendment) (GST) Bill, 2014

President Pranab Mukherjee has given assent to the Constitution (122nd Amendment) (GST) Bill, 2014 as per Article 368 of the Constitution.
With the assent, bill becomes law and opens road to roll out a new indirect tax regime and gives way for the concept of one nation, one tax.
What is GST?
The GST is a single indirect tax throughout country. It subsumes most of the Central and State indirect taxes such as the Value Added Tax (VAT), excise duty, service tax, central sales tax, additional customs duty and special additional duty of customs.
Note: The Constitution (122nd Amendment) (GST) Bill, 2014 will enter into the statute book as The Constitution (101st Amendment) Bill, 2016.
Key Facts

• The assent to the Bill will pave the way for setting up a GST Council that will decide the tax rate, cess and surcharges.
• The Union Government will notify the GST Council. It will be headed by Union Finance Minister Arun Jaitley and it will comprise state Finance Ministers.
• Now the Central and State Governments will pass the Central GST, Integrated GST and State GST laws respectively.
• The CGST and IGST will be drafted on the basis of the model GST law. The IGST law would deal with inter-State movement of goods and services.
• The States will draft their respective GST (SGST) laws incorporating State-based exemptions.

Background

• The Bill was passed by the Parliament in August 2016 and was later circulated to the State governments seeking their ratification.
• As it was constitutional amendment bill dealing with fiscal federalism it was necessary to be ratified by at least 50% legislative Assemblies of states (15 states of total 29).
• The Bill was sent to presidential assent after 19 States had ratified it by passing resolution with simple majority. Assam was the first state to ratify it.
• The other States that have passed the bill include Bihar, Jharkhand, Chhattisgarh, Himachal Pradesh, Gujarat, Madhya Pradesh, Delhi (UT), Nagaland, Maharashtra, Haryana, Sikkim, Mizoram, Telangana, Goa, Odisha, Rajasthan, Arunachal Pradesh and Andhra Pradesh.

Month: Current Affairs - September, 2016