The Constitutional Amendment Bill on the Goods and Service Tax (GST) was given a green signal by the Cabinet on Wednesday. The introduction of the Bill in legislation is now lined up for the current winter session of the Parliament.
The Bill seeks to unify the Indian markets by removing barriers to movement of goods across states and cutting compliance costs for companies. The conflicting issues of the Centre and the State struck the clearance of the Bill but after a prolonged wait, the major concerns were addressed.
The first concern was the inclusion of petroleum under the GST Constitutional Amendment Bill, to which Centre was in favour as against the State. The Bill sought to include petroleum within GST, but the excise duty would be levied by the Centre along with VAT for initial years.
The Bill also entailed that the Centre will provide full compensation for revenue loss that would be faced by States after the implementation of GST. On the third issue of subsuming the entry tax under GST, the Bill favoured Centre’s proposal and nodded to the same.