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Cabinet to take up GST Bill today
Business Standard, March 15, 2011
Unfazed by the opposition from various states, including BJP-ruled
ones, the Union Cabinet is set to take up a Constitution
Amendment Bill tomorrow to roll out the Goods and Services Tax (GST),
which has already missed a deadline and is set to miss new ones
as well.
Officials said the Cabinet will take up the Bill as the
government is keen to table the Bill in this session of
Parliament.
A
Constitution Amendment Bill is necessary since according to the
current arrangement, the Centre cannot impose a tax beyond
manufacturing and states cannot levy service tax. Under the GST,
the Centre and states will impose the tax on common goods and
services. Hence, state-level VAT, and the Centre’s excise duty
and service tax will be done away, once GST is implemented. The
new indirect tax will also subsume cess, surcharges and other
local levies.
For
the Bill to be passed, a two-thirds majority in Parliament is
needed, as is the approval of at least half the states. With BJP-ruled
and a few other states still opposing the Bill, despite the four
drafts prepared by the Centre, it will take much convincing from
senior Congress leaders like finance minister Pranab Mukherjee
to convince the opposition.
To
assuage the states’ opposition, the Centre had prepared a fourth
draft of the Bill, dropping some key proposals. The third draft
had proposed the setting up a GST Council by an Act of
Parliament, instead of a Presidential order, as proposed in the
second draft. The fourth draft has now proposed setting up a GST
Council by Presidential order. It will describe the composition
and the role of the Council, to be headed by the Union finance
minister.
“The
Bill is a combination of the second and third drafts. The
proposals under Article 279A and 279B in the second draft have
been restored, as most states felt the second draft was better.
The proposals under the third draft about powers to Union
Territories have been retained,” said a finance ministry
official.
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