Making of GST Law in India

Taxation

Making of GST Law in india

As we all are aware that Government has decided to implement GST w.e.f 1st July 2017. I received many email asking questions about GST. I request the reader to ask their questions under “Ask free Questions” tab.

What is GST?

GST stands for Goods and Service Tax. As we know there are various types of indirect taxes like Customs, Excise duty, Sales tax/VAT/CST, Octroi/Entry tax, Service Tax etc. Some of these taxes like Sales tax/VAT/CST and Entry tax etc. are the part of revenue for State Government while others like Excise duty and Service tax etc. are the part of revenue for Central Government. With the intention of easiness of process in indirect tax regime, bringing in revolutionary changes in indirect tax system and for giving a push to industrial development in India Central Government has decided to merge various indirect taxes into one i.e. GST.

Constitutional Validity

But some of above indirect taxes fall under State list of Schedule VII of Constitution where only state Government have power to levy taxes and some fall under Union list of Schedule VII of Constitution. Hence amendment in constitution was required for assigning concurrent powers to Centre and state to Levy GST. For this purpose Parliament of India passed Constitution (101st Amendment) Act, 2016 on 08.09.2016. After this Amendment-

  • Concurrent jurisdiction for levy & collection of GST by the Centre & the States – Article 246A.
  • Centre to levy & collect IGST on supplies in the course of inter-State trade or commerce including imports – Article 269A.
  • Compensation for loss of revenue to States for five years on recommendation of GSTC – Clause 19.
  • GST on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas & aviation turbine fuel to be levied from a later date on recommendations of GST Council.
  • GST council is to be constituted by President within 60 days of this Act. Hence GST council was constituted on 12.09.2016.
  • GST Council has to meet and make recommendation on various aspects of GST like GST Law, Procedures, GST Rates, Exemptions and thresholds etc.
  • Members of GST Council are:
  1. Union Finance Minister (Chairperson)
  2. Finance Minister of Each State in India.

In India, following GST law are being passed by Central Government:-

  1. THE CONSTITUTION (ONE HUNDRED AND FIRST AMENDMENT) ACT, 2016
  2. THE INTEGRATED GOODS AND SERVICES TAX ACT, 2017 (IGST)
  3. THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 (CGST)
  4. THE GOODS AND SERVICES TAX (COMPENSATION TO STATES) ACT, 2017
  5. THE UNION TERRITORY GOODS AND SERVICES TAX ACT, 2017
  6. GST – Transition Rules
  7. GST – Registration Rules
  8. GST – Return Rules.
  9. GST – Composition Scheme Rules.
  10. GST – Invoice Rules.
  11. GST – Payment Rules
  12. GST – Input Tax Credit (ITC) Rules.
  13. GST – Refund Rules.
  14. GST – Valuation Rules.

In India, following GST law are being passed by respective State Government:-

The State Goods and Service Tax Act (SGST Act) for each respective State:-

 

Indirect taxes which are merged in GST:-

Central Levies:

  • Central Excise duty
  • Duties of Excise (Medicinal and Toilet Preparations)
  • Additional Duties of Excise (Goods of Special Importance)
  • Additional Duties of Excise (Textiles and Textile Products)
  • Additional Duties of Customs (commonly known as CVD)
  • Special Additional Duty of Customs (SAD)
  • Service Tax

State Levies:

  • State VAT
  • Central Sales Tax
  • Purchase Tax
  • Luxury Tax
  • Entry Tax/ Octroi
  • Entertainment Tax
  • Taxes on advertisements
  • Taxes on lotteries, betting and gambling