President Pranab Mukherjee, has given his approval to four supporting legislations, related to the Goods and Services Tax (GST) Bill, paving the way for the roll out of, “one nation, one tax” regime, from July 1.

Earlier, the four main bills that were passed by both the houses of the Parliament, during the budget session, on April 6, without any amendments. The four draft bills include, the Central GST, Integrated GST, Union Territory GST and Compensation GST.

The Government, wanted to put the indirect tax reform, effective from April 1. But, due to differences with States, over power sharing and revenues, the government was forced to push back the roll-out deadline to July. 

Before passing of the draft model GST laws, the GST Council headed by Finance Minister Arun Jaitley as chairman, and the nodal agency met over twelve times, for all the GST related issues. They, however, succeeded in bringing a unanimity on unresolved issues.

The council has decided a four-tier taxation system. There would be a lower tax rate of 5%, two standard tax rates of 12 and 18% and fourth higher tax rate of 28%, under the GST.

The GST council members, at the twelfth meeting, agreed upon a peak rate of 40% under the GST. This was included, 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 both the Houses of the Parliament, as Money Bill, as they pertain to taxation laws of India. a bill that seeks money from the Consolidated Fund of India mainly for the government expenditure is also categorized as Money Bill. There would be no approval from the Rajya Sabha, for the Money Bill. The Upper House (Rajya Sabha), can take up a Money Bill for debate and recommend changes, but those changes are not always included.

While, the Lok Sabha has the choice to either include changes suggested by the Rajya Sabha into the bill or reject it altogether. The Ruling Bharatiya Janta Party of Prime Minister Narendra Modi, unlike the Lok Sabha does not hold any majority in Rajya Sabha.

New Income Tax Rules Formed President Pranab Mukherjee Gives Approval

By Supraja