GST Bill gets Cabinet nod, may be tabled in Parliament this session

The Cabinet gave the go-ahead to the Constitution Amendment Bill on Goods and Services Tax (GST) on Wednesday paving the way for its introduction in ongoing Winter Session of Parliament, which concludes on December 23.

The government aims to roll out GST from April 1, 2016. The revised Constitutional Amendment Bill was brought before the Cabinet after the Centre and states earlier this week reached a consensus on contentious issues, including those related to taxes on petroleum products, which were holding up the proposed nation-wide indirect tax regime for about seven years.

GST, which has been stuck for the last seven years, will subsume most of the indirect taxes like excise duty and service tax at the Central level and value-added tax and local levies on the states front. Earlier this week in a compromise deal, the Centre decided to keep petroleum out of GST in return for states agreeing to entry tax being subsumed in the new tax regime.

On the issue of compensation to states for revenue loss because of subsuming of all indirect taxes in GST, the finance ministry was to seek legal opinion on how it could be accommodated in the Constitution Amendment Bill that it wants to table in the ongoing session of Parliament. States, which earn more than 50 per cent of their revenues from taxes on petrol and other petro products, wanted it to be out of GST so they could continue with levying different tax rates on these products.

Meanwhile, the Lok Sabha cleared the Companies Bill, which will make it easier for corporates to do business. The Lok Sabha passed the Companies Act (Amendment) Bill, 2014, which seeks to make 14 amendments, including those pertaining to related party transactions, that will make it easier for corporates to do business.