List of major chronological events that led to the introduction of GST

Here we bring you a list of major chronological events that have led to the launch of the GST ...

New Delhi, June 30: In a few hours from now, India's biggest tax reform--Goods and Services Tax (GST)--will be launched in Parliament's Central Hall on Friday night. The hour-long starry event--to mark the grand launch of the GST--will be graced by President Pranab Mukherjee, Prime Minister Narendra Modi and a host of dignitaries from various walks of life.

It took several years--to be exact 21--for India to get ready to unveil the major indirect tax reform measure.

The journey of the GST started in a modest way back in 1986-1987, when the then finance minister VP Singh introduced Modified Value Added Tax (MODVAT) in 1986 in Parliament.

Since then, various governments at the Centre under the leadership of different finance ministers worked towards the final shape of the present GST, which is coming into force from Saturday.

The GST, an indirect tax system throughout India, will replace various taxes levied by the central and state governments. The GST is said to simplify a web of taxes, regulations and border levies by subsuming an array of central and state levies including excise duty, service tax and VAT.

It is expected to gradually re-shape India's business landscape, making the world's fastest-growing major economy an easier place to do business.

Here we bring you a list of major chronological events that have led to the launch of the GST ...

1. The GST was first discussed in the report of the Kelkar Task Force on indirect taxes. In 2003, the Kelkar Task Force on indirect tax had suggested a comprehensive GST based on VAT principle.

2. A proposal to introduce a National level Goods and Services Tax (GST) by April 1, 2010, was first mooted in the Budget Speech for the financial year 2006-07.

3. Since the proposal involved reform/ restructuring of not only indirect taxes levied by the Centre but also the States, the responsibility of preparing a Design and Road Map for the implementation of GST was assigned to the Empowered Committee of State Finance Ministers (EC).

4. Based on inputs from Govt of India and States, the EC released its First Discussion Paper on Goods and Services Tax in India in November, 2009.

5. In order to take the GST related work further, a Joint Working Group consisting of officers from Central as well as State Government was constituted in September, 2009.

6. In order to amend the Constitution to enable introduction of GST, the Constitution (115th Amendment) Bill was introduced in the Lok Sabha in March 2011. As per the prescribed procedure, the Bill was referred to the Standing Committee on Finance of the Parliament for examination and report.

7. Meanwhile, in pursuance of the decision taken in a meeting between the Union Finance Minister and the Empowered Committee of State Finance Ministers on November 8, 2012, a 'Committee on GST Design', consisting of the officials of the Government of India, State Governments and the Empowered Committee was constituted.

8. This Committee did a detailed discussion on GST design including the Constitution (115th) Amendment Bill and submitted its report in January, 2013. Based on this Report, the EC recommended certain changes in the Constitution Amendment Bill in their meeting at Bhubaneswar in January 2013.

9. The Empowered Committee in the Bhubaneswar meeting also decided to constitute three committees of officers to discuss and report on various aspects of GST as follows:-
(a) Committee on Place of Supply Rules and Revenue Neutral Rates;

(b) Committee on dual control, threshold and exemptions;

(c) Committee on IGST and GST on imports.

1. The Parliamentary Standing Committee submitted its Report in August, 2013 to the Lok Sabha. The recommendations of the Empowered Committee and the recommendations of the Parliamentary Standing Committee were examined in the Ministry in consultation with the Legislative Department. Most of the recommendations made by the Empowered Committee and the Parliamentary Standing Committee were accepted and the draft Amendment Bill was suitably revised.

2. The final draft Constitutional Amendment Bill incorporating the above stated changes were sent to the Empowered Committee for consideration in September 2013.

3. The EC once again made certain recommendations on the Bill after its meeting in Shillong in November 2013. Certain recommendations of the Empowered Committee were incorporated in the draft Constitution (115th Amendment) Bill. The revised draft was sent for consideration of the Empowered Committee in March, 2014.

4. The 115th Constitutional (Amendment) Bill, 2011, for the introduction of GST introduced in the Lok Sabha in March 2011 lapsed with the dissolution of the 15th Lok Sabha.

5. In June 2014, the draft Constitution Amendment Bill was sent to the Empowered Committee after approval of the new Government.

6. Based on a broad consensus reached with the Empowered Committee on the contours of the Bill, the Cabinet on December 17, 2014, approved the proposal for introduction of a Bill in Parliament for amending the Constitution of India to facilitate the introduction of GST in the country.

7. The Bill was introduced in the Lok Sabha on December 19, 2014, and was passed by the Lok Sabha on May 6, 2015. It was then referred to the Select Committee of Rajya Sabha, which submitted its report on July 22, 2015.

8. Finally, the GST Amendment Bill got Parliament's nod in August, 2016. The GST roll out was now only a matter of time.

9. The GST Council was formed. Approval from requisite number of states was secured. In January, 2017, Arun Jaitley announced that GST would be rolled out on July 1.

OneIndia News