Cabinet finally approves GST
The Union Cabinet has finally approved the much-awaited Constitutional Amendment Bill on the Goods and Services Tax (GST), which would be introduced in the current winter session of Parliament, official sources said.
After the consensus of the Empowered Committee of state Chief Ministers, the Bill was presented to the Cabinet. Once the Constitutional Amendments are passed by both Houses of Parliament by two-third majority, the actual GST Bill would be tabled to be discussed and passed in both Houses of Parliament. State legislatures will also have to table and pass their own GST Bills, sources added.
Though states had asked to exclude petroleum products from GST, the government wanted to keep it within the GST ambit so that the chain of providing reimbursement for input taxes is not broken.
It is learnt that the Centre would be allowed to levy excise duty on petroleum products and the states would add value-added tax (VAT) in the initial years.
Since the Bill contains the compensation for five years, but on a tapering basis, the Centre would provide full compensation for the revenue loss for the first three years and then progressively reduce it for the next two years.
Hailing the move by the government, a senior official of Deloitte in India, said, "This is a welcome move because petro products and entry taxes have been subsumed in the GST. The introduction of this reform will further encourage the industry and give confidence to investors."
Source: Exim News Service
CAclubindia
