GST LAW HEADING TOWARDS REALITY

GST Update 13.09.2016

GST DAILY DOSE OF UPDATION:-

GST LAW HEADING TOWARDS REALITY:-Introduction of GST in India was in news since long time but there was doubt in the minds regarding its legislation and implementation in India. However, after the passage of the Constitution (One Hundred and Twenty Second Amendment) Bill, 2016 for introduction of GST by the Rajya Sabha, the hopes of citizens of India have risen and the probability of GST being a reality has increased. The Constitutional Amendment Bill received the assent of the President on 08.09.2016 wherein new Article 279A has been introduced. The new Article 279A has been implemented with effect from 12.09.2016 according to which, GST Council has to be constituted by the President within a period of 60 days of implementation of Article 279A.

The formation and composition of GST Council holds immense significance in the smooth implementation of GST Law because crucial decisions are to be taken by GST Council. The GST Council will comprise of the Union Finance Minister as Chairperson while State Finance Ministers and Nominated Ministers as members. The pace with which advancements are being made for implementation of the GST Law indicate that the GST reform will be soon turning from a dream to reality for India. The speedily ratification of the Constitutional Amendment Bill by 16 States within a short span of 23 days is really commendable job. Not only this, the government appears to have geared up as it is running ahead of its targets. The swift creation of GST Council is the best example. The Union Cabinet has approved the setting up of GST Council and its Secretariat. The Union Revenue Secretary has already written to Chief Secretaries of States seeking nominations to the Council. The Union Cabinet has also created posts of Additional Secretary to the Council and four posts of Commissioner at the level of Joint Secretary to the Centre in the Secretariat. The appointments approved by the Cabinet includes Union Revenue Secretary as the ex-officio secretary of the Council and inclusion of CBEC Chairperson as a permanent and non-voting invitee to all of its proceedings. The GST Council will decide on issues such as threshold limits, exemptions in GST and most importantly, rate of GST. It is being reported that the first meeting of GST Council will be held on 22 and 23 September, 2016. Not only this, Union Finance Minister, Mr. Arun Jaitley has also expressed hopes that the core issues of exemptions, GST rates would be decided by the GST Council by 22^nd November, 2016 so that Model Laws can be considered for their passage in Winter Session of the Parliament.

It is pertinent to mention here that for successful implementation of GST reform, development of sound infrastructure is also required and the process for the same has also already begun. The IT infrastructure of GST will be governed by the GSTN called as Goods and Services Tax Network. It is being reported that the Government of India will hold 24.5% stake in GSTN while State Governments together hold 24.5% stake totaling to 49% stake of government. However, balance 51% stake will be held by non-governmental financial institutions such as HDFC, ICICI etc. Mr. Subramanian Swamy, MP of BJP has expressed his opposition for majority stake of private entities in GSTN as the portal of GSTN would be handling tax related sensitive information and the majority stake of private players will definitely pose threat to the integrity of the data contained in the network. Presently, the task of developing GSTN is entrusted to Infosys.

Nonetheless, despite various oppositions, the Modi led government has managed to infuse a sense of confidence among people that GST will be reality soon, may be, in the next financial year. Lets hope for the best and keep our fingers crossed.

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GST Update 13.09.2016

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