The much-awaited GST Bill all set to be tabled in Rajya Sabha

The much-awaited GST Bill is all set to be tabled in Rajya Sabha on 3 August 2016. The government has secured all-round support for the constitution amendment bill that will be taken up by the Upper House for passage and potentially pave the way for rolling out a single tax to replace a string of local levies.

Finance Minister Arun Jaitley has been meeting the leaders of Congress and other parties, including SP, BJD, TMC and RJD, to build a consensus on the passage of the long pending indirect tax reform Bill in the Rajya Sabha. BJP and Congress issue whip to their MPs to remain present in the house for passage of the Bill.

The GST bill was introduced in the Lok Sabha on December 19, 2014, and was passed by the Lok Sabha around five months later on May 6. It was then referred to a Select Committee of the Rajya Sabha which submitted its report on July 22. These amendments will need to get the nod of the Lok Sabha again, following which at least 50 percent of the states need to ratify the bill for it to become a statute. This again could be a long-drawn process, since states will have their own issues and queries. 

The Bill, which was approved by the Lok Sabha in May, provided for 1 per cent additional tax on inter-state trade and commerce for two years or more as may be decided by the GST Council. Even the Rajya Sabha Select Committee had suggested removal of this provision as it would lead to cascading of taxes.

The Constitution (122nd Amendment) Bill, 2014, which lays the ground for roll out of Goods and Services Tax regime that will include various central indirect taxes including the Central Excise Duty, Countervailing Duty, Service Tax, etc. It also subsumes state value added tax, octroi and entry tax, luxury tax among others. The expected passage of a key constitutional amendment would resolve crucial issues needed to transform India`s $ 2 trillion economy and 1.3 billion consumers into a single market for the first time.