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President Pranab Mukherjee has given his assent to the landmark Constitutional (amendment) Bill that would pave the way for the Goods and Services tax (GST) introduction in the country.
Recently, as many as 16 States ratified the Constitution (122 amendment) Bill, paving the way for the Presidential assent to the Bill.
With the Constitution getting amended, the Centre will now have the right to tax at the retail stage and the States too will have the right to collect service service tax.
Next action
The action will now shift to the Winter Session when the Centre is likely to introduce the all important Central GST Bill in the Parliament.
Indications are that the Modi-led Government will seek Cabinet approval for setting up a GST Council.
The Centre is looking to implement dual GST from April 1,2017. Revenue Secretary Hasmukh Adhia had recently tweeted that the Government was ahead of schedule in implementation of GST.
Experts' take
Commenting on the latest development, V.S.Krishnan, Advisor, Tax Policy Group, EY told Business Line that the new legal position — Constitutional amendment — would also apply on those States that had not yet ratified the Constitutional (amendment) Bill on GST.
This would also mean that with the Presidential assent of the Constitutional Amendment the States cannot from tomorrow levy entry taxes, he noted.
In the next few days, steps are likely to be taken for the setting up of GST Council and a GST Secretariat to support the working of the council. The law provides that GST Council has to be set up within 60 days and one is likely to see this become a reality much earlier
M. S. Mani, Senior Director, Deloitte Haskins & Sells LLP, said this signifies the determination of the Government to proceed with GST from April 1,2017. “It is essential for business houses to approach GST implementation projects on a war footing now as there is a limited amount of time left to get ready for the country's most significant tax reform", he said.
Suresh Surana, Founder of RSM Astute Consulting, said that GST Council, which will have to be set up, will need to arrive at consensus around the different rate schedules and products and services to be listed under each rate category (exempt, low rate/s, revenue neutral rate and higher rate).
For GST council to arrive at decision, concurrence of at least 20 States and union territories is required as against 16 States for Constitutional amendment, he noted.
Srivats.kr@thehindu.co.in
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