Mumbai: President Pranab Mukherjee on Thursday gave his assent to four key Goods and Services Tax legislations. With this, the GST has further moved closer to its July roll-out.
The four key GST bills that were earlier passed by both the houses of Parliament are Central GST, Integrated GST, Union Territory GST and Compensation GST.
Earlier the government wanted to put into effect the indirect tax reform from April 1. But its differences with states over sharing of power and revenues forced government to push back roll-out deadline to July.
All-powerful GST Council, nodal agency for all GST related issues, met twelve times before it could pass draft model GST laws. The Council that has Finance Minister Arun Jaitley as chairman and state finance ministers as its members succeeded in bringing a unanimity on unresolved issues.
The Council has decided a four-tier taxation system under GST. A lower tax rate of 5 per cent, two standard tax rates of 12 and 18 per cent and fourth higher tax rate of 28 per cent.
At the twelfth meeting, GST Council members agreed upon a peak rate of 40 per cent under GST. This was incorporated only as an enabling provision for the Council so that in future it does not need to approach Parliament for a change in peak rate.
The four GST bills were clubbed together and presented before the Lok Sabha and the Rajya Sabha as Money Bill as they pertain to taxation laws of India. Besides, a bill that seeks money from the Consolidated Fund of India mainly for government expenditure is also categorised as Money Bill.
A Money Bill does not necessarily require approval from the Rajya Sabha, upper house of Indian Parliament. Rajya Sabha can take up a Money Bill for debate and recommend changes but those changes are not always included.
Lok Sabha has the discretion to either incorporate changes suggested by the Rajya Sabha into the bill or reject it altogether. Ruling Bharatiya Janta Party of Prime Minister Narendra Modi unlike the Lok Sabha does not hold majority in Rajya Sabha....