TaxTMI 
TaxTMI 
TaxTMI 
Yes, I call it as the most popular constitutional amendment bill in the history of India since Independence and I think so it’s popularity will not be beat by any future constitutional amendment bill unless constitutional amendment bill for reservation will get announced!!!
Why is this so popular even amongst the general public? Because it has been in discussion since long? or because since it is delayed? or because of the drama taking place at lower house and upper house while passing the bill? or because it is about the introduction of major indirect tax reforms in India? Likewise we all have so many questions about it. But in my view it is in discussion as this will brought major indirect tax reforms in India which will have an indirect impact on each individual.
The bill was passed in the lower house i.e. Lokshabha on 06/05/2015 and after more than a year it has been passed by the upper house i.e. Rajyasabha on 03/08/2016 with clear majority of 203 members. Now, it is just few steps away wherein, probably by 12/08/2016 again it will be presented before the loksabha as it was amended after it was passed by loksabha then in next stage it has to be ratified by at least half of the state assemblies i.e. 15 state assemblies and then finally will be forwarded for the assent of the president to become it as constitutional amendment.
The constitutional bill passed by the Rajyasabha with amendment has following main features.
COPENSATION TO STATES FOR LOSS OF REVENUE:
Main trigger point to get the nod at Rajyasabha is Centre agreed to compensate state for the revenue loss incurred by the states under new GST regime for a period of Five years from introduction of the levy of GST. The clause 19 of the bill deals with this provisions wherein under the earlier bill in 2014, there was a provision for compensation to state however, the wording used was “parliament may, by law,” hence now it has been made mandatory by its replacement with the use of words “parliament shall, by law,”. Hence, Centre has given the assurance to states to compensate for the loss of revenue.
1% ADDITIONAL TAX SCRAPPED:
The 1% additional levy has been scrapped. The clause 18 of the bill was providing for additional 1% tax on supply of goods and services and it was supposed to be used by the Centre to pay it to the states from where supply of goods and services were originated. The clause 18 has been completely omitted as Centre has already agreed to compensate the states for the loss incurred by them due to introduction of GST. Previously this clause was specifically kept for the states like Gujarat, Maharashtra, Tamil Nadu which were mainly manufacturing states where it is not necessary that consumption will also takes place within the states and introduction of destination based GST may lead to loss of revenue to such states. Now since, loss will be compensated by Centre to every states there is no need to levy such additional tax at all.
Hence, it is welcome move and from day one of the introduction, it was objected as it was against the principal of GST as it was lead to the dual taxation as well as instead destination based it was also taxing origin based.
DISPUTE RESOLUTION FORUM:
The Goods and Service Tax Council will adjudicate the disputes instead by judiciary wherein, such disputes are between (a) Centre Versus states (b) One states versus Another State (c) Centre and states versus states. Such disputes can be of any type like sharing of revenue or applicability of rate or applicability of tax by which state, etc.
NO CAP FOR RATE:
In the bill no upper limit has been provided for the rate of GST. It was recommended by most of the states to include upper limit rate of GST in the constitution itself. However, in the bill cap limit has not been provided as the rate will be first recommended by the GST council wherein, states will also be members of the council so every states has right to say for the GST rates to be announced. Further, I have not seen any bill wherein, rates has been specified in the constitution itself as if in future to meet the requirements of expenses it is to be increased, again one need to amend the constitution. Therefore, rates will be provided in the CGST, SGST and IGST bills itself.
ASSESSEE BELOW 1.5 CRORE OF TURNOVER TO BE ADJUDICATED ONLY BY STATES:
It was recommended to include that small assesse having turnover below 1.5 crore, to be adjudicated only by the states. However, it has not been included as it is constitutional amendment bill. The same will be taken care by the GST council and recommended accordingly in the CGST, SGST and IGST bills itself.
It is yet to be seen that what GST councils “recommends” for each of the aspects and “how such recommendations will be actually implemented while passing CGST, SGST and IGST bills?” Further, it is also to be seen that whether it will be presented as money bill or as finance bill?