Rajya Sabha passed the Constitutional (122nd
Amendment) Bill that will enable the Goods and Services Tax (GST). The Bill
gives concurrent taxation powers to both the centre and states. This implies
that the centre will levy a central GST (CGST), while states will levy a state
GST (SGST). For goods and services that
pass through several states, or imports, the centre will levy another tax, the
Integrated GST (IGST).
This Bill has previously been passed by Lok Sabha. However,
the government recently proposed amendments to the Bill which are related to: (i)
an additional tax up to 1%; (ii) compensation to states; and (iii) dispute
resolution by the GST Council (details below).The Bill will now have to go back to Lok Sabha
for it to accept these new amendments.
Additional tax up to 1% on interstate trade: The
amendments delete the provision.
Compensation to states: The amendments state
that Parliament shall, by law, provide for compensation to states for any loss
of revenues, for a period which may extend to five years. This would be based
on the recommendations of the GST Council.
This implies that (i) Parliament must provide compensation; and (ii)
compensation cannot be provided for more than five years, but allows Parliament
to decide a shorter time period. The
2014 Bill used the term ‘may’ instead of ‘shall’.
Dispute resolution: The GST Council shall
establish a mechanism to adjudicate any dispute arising out of its
recommendations. Disputes can be between: (a) the centre vs. one or more
states; (b) the centre and states vs. one or more states; (c) state vs. state. This implies that there will be a standing
mechanism to resolve disputes.
During the debate members raised their concerns about the various
challenges that may arise during transition to the GST model. Members raised
questions regarding the working of the GST Network, registration to it, the
mechanism of sharing revenue with states after collection etc. The mechanism of
the GST council and its role in dispute resolution were also points raised by
members during their speeches. Members from across political parties further
urged the government to assure the House that the bill to levy CGST and IGST will not be
introduced as money bills.
on Sustainable Development Goals was taken up in Lok Sabha. Members raised a range of issues like
affordable housing, greater investment in public health and education among