Goods & Service Tax: A Path Breaking Indirect Tax Reform

 "GST is a Comprehensive Multistage Destination based Consumption Tax levied at every stage of Value Addition in the life cycle of a Product or Service"

Pre GST period was so complex with multiple taxes, tax rates, tax authorities, assessment procedures, and mode of payment of taxes. In view of the difficulties certain taxes imposed by central and state governments have been subsumed in a single tax called Goods and Service Tax. GST was a path breaking indirect tax reform which created a common national market. It has subsumed multiple indirect taxes like Excise duty, Service Tax, VAT, Luxury Tax, Entertainment Tax etc.

History of GST

In the year 2000, idea of unified tax system introduced by A. B. Vajpayee Government. Under the chairmanship of Azeem Das Gupta, an empowered committee of state financial ministers was formed to create a structure for designing GST.

In 2006, Partha Sarathi Shorne, the Advisor of P. Chidambaram announced that States will have to prepare and make reforms for the upcoming GST regime.

In the 2006-07 Union Budget, the Central Govt set April 2010 as GST introduction date.

2008 budget confirmed that considerable progress was being made in the preparation of road map for GST.

In 2009 the empowered committee of state finance ministers after various meeting reached an amicable formula for implementation of GST in India.

In 2010 government introduced the mission made project that laid the foundation for GST.

In 2011, Constitutional Amendment Bill (115th amendment) introduced in Lok Sabha.

In 2012, P. Chidambaram and other financial ministers of states held meetings and set deadline for resolution of issue as 31st December 2012.

In 2013, Finance Minister announced compensation to states. Standing Committees submitted their report with few amendments.

In 2014, 115th Constitution Amendment Bill lapsed. And new government at centre with  Prime Minister as Narendra Modi and new Finance Minister as Arun Jaitley and 122nd Constitution Amendment Bill introduced in Parliament.

In May 2015 Lok Sabha passed this bill.

In August 2016 the 122nd Constitutional Amendment Bill was passed by Rajya Sabha with certain amendments.

On 8th September 2016, President of India gave his assent and this Constitutional Amendment Bill became an Act.

In 2017, four bills related to GST Act was passed. These are,

Central GST bill, Integrated GST bill, Union Territory GST bill and GST (compensation to States) bill.

GST council finalized GST rates and GST rules.

On 1st July 2017, a comprehensive dual GST has replaced the complex multiple indirect tax structure of India.

Rajashree. V, Assistant Professor of Commerce, Al Shifa College of Arts and Science, Kizhattoor, Perinthalmanna