BASIC CONCEPTS OF GST (PART- 11)

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BASIC CONCEPTS OF GST (PART- 11)
By: Dr. Sanjiv Agarwal
March 11, 2016
  • Article

Steps Involved in GST Introduction

Following steps are needed on political, administrative and technological fronts for smooth implementation of GST:

  • Constitutional amendments (pending in Parliament (Rajya Sabha); Standing Committee Report submitted; draws opposition from Congress)
  • Drafting of GST law (process started)
  • Strong political commitment (looks a distant reality in present political set up).
  • Arriving at common / general consensus on major issues including political agreement (efforts are on through Empowered Committee / negotiations )
  • Setting up a high level committee for monitoring the project of GST (Empowered committee is in place).
  • Preparing a blueprint/road map for GST (to be made public)
  • Creating a conducive environment for GST (slow efforts)
  • Centre-States coordination (efforts on, onus on Empowered Committee)
  • Consolidation of Central Excise, Service Tax and VAT on imports/exports
  • Identification of issues to be resolved (almost done)
  • Interaction with trade and industry and others stake holders concerned (being held but need to be up scaled)
  • Building up GST infrastructure and administrative machinery (GSTIN formed as a company, IT company identified)
  • Establishment of information technology systems, software and enabling environment (GSTN has started working)
  • Adequate investment in creating administration, providing training and public education and awareness programme.
  • Dissemination of processes to public (four discussion papers on registration, payment, return and refunds released for public comments)
  • Fixation of cut-off date for implementation (1st April, 2016 announced but does not seem to be achievable

GST: THE JOURNEY SO FAR

Chronology of major events in progress of Goods & Service Tax in India

Year

Milestone

1974

LK Jha Committee suggests VAT

1986

MODVAT introduced in India from 1st of March on select commodities

1991

Chelliah Committee recommends VAT

1999

FM announces decision to introduce VAT in India.
Formation of Empowered Committee on VAT

2002

Task Force on Indirect Taxes report headed by Kelkar

CENVAT introduced on all commodities at central level

2003

VAT introduced in first Indian State of Haryana

2005

VAT in 24 States/UTs including Punjab, Chandigarh, HP, J&K and Delhi.

2006

VAT implemented in 5 more States including Rajasthan.

2007

FM announces GST introduction in India from April 01, 2010.

Parthasarathi Shome submits a study paper on GST.

Empowered Committee of State Finance Ministers constitutes the Joint  Working Group.

VAT implemented in Tamil Nadu & Puducherry.

Central Sales Tax (CST) phase out starts, CST cut to 3%.
Joint Working Group set up for proposing GST roadmap and structure.

2008

VAT introduced in the last Indian State of UP from January 01, 2008.

EC finalises its views on a broad GST structure with consensus on Dual GST (Central & State GST), separate legislation, levy and administration.
CST reduced to 2%

2009

Empowered Committee release First Discussion Paper on GST in November.

Report of Task Force on GST of 13th Finance Commission in December

Report of 13th Finance Commission (TFC) (Chapter 5 on GST) in December

2010

Proposed date to introduce GST in India postponed to April 01, 2011.

2011

Government introduces Constitution Amendment Bill on GST in Lok Sabha

2013

Parliament Standing Committee submit reports on GST Constitutional Amendment Bill

Standing Committee recommendations incorporated in Bill

Standing Committee on Finance tables its report on GST Bill.

EC rejects Central Government’s proposal to include petroleum products under GST.

2014

March: Revised Bill incorporating recommendations of Standing Committee  sent to EC for examination

Previous Constitution Amendment Bill lapses.

Newly-elected Government sets April, 2016 as new date for GST roll-out.

GST sub-committee in the EC proposes a revenue–neutral rate of 26.7%.

Alcohol to be kept outside the purview of GST.

All entry taxes proposed to be subsumed under GST, whether collected by States or local bodies.

Petroleum and petroleum products to be subsumed in GST, with nominal or zero-rated tax.

GST compensation to States pegged at around ₹ 11,000 crore.

Centre to provide three year compensation on the revenue loss incurred by States after GST roll-out.

December : GST Constitutional Amendment Bill moved in Lok Sabha

2015

06.05.2015

Lok Sabha passes GST Bill

12.05.2015

Bill on GST not passed by Rajya Sabha ; referred to Select Committee

17.06.2015

Committees Constituted to recommend tax rates and to monitor progress of IT preparedness / mechanism of GST / drafting of rules.

22.07.2015

Select Committee of Rajya Sabha tabled its report on GST Bill

29.07.2015

Union Cabinet approves Select Committee recommendations

11.10.2015

Discussion papers to on business processes on registration, payment, returns and refunds under GST made public

03.12.2015

Committee on Tax rates submits reports

?

Revised draft to be presented in Parliament / Rajya Sabha nod awaited

Source: https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=6739&kw=basic-concepts-gst-part-11

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