BASIC CONCEPTS OF GST (PART- 11)

[Dr. Sanjiv Agarwal]

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 (1^st 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