December 20, 2014
The Constitution (122nd Amendment) Bill, or the Goods and Services Tax (GST) Bill, was introduced by finance minister Arun Jaitley in Lok Sabha on Friday. In accordance with the discussions that Jaitley held with the state finance ministers earlier this month, the government has kept alcoholic liquor out of the purview of GST, and even though petrol has been brought under GST, but the tax will not be applied on it until notified at later date.
The government has made the compensation provisions to the states a part of Bill, and conferred simultaneous power to Union and state legislatures to legislate on GST.
The Bill also provides for creation of a GST Council, which will be a joint forum of the Centre and the states. GST, the much awaited tax reform, will simplify and harmonise the indirect tax regime in the country. It will broaden the tax base, and result in better tax compliance due to a robust IT infrastructure.