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The Constitutional Amendment Bill on the Goods and Service Tax (GST) is likely to be approved by the Union Cabinet today, paving the way for the Bill to be introduced in Parliament before the end of the winter session on December 23.
After two marathon meetings with finance ministers of some states, Finance Minister Arun Jaitley managed to build some sort of a consensus by late Monday evening. The Bill is likely to address states' demand of keeping petroleum products outside GST but only for the first few years and give some kind of constitutional guarantee for compensation to states for loss of revenue due to the new indirect tax.
However, the entry tax might be subsumed in GST, against the states' demand to keep it out of the new tax system.
Once the amendments are passed by both houses of Parliament with a two-thirds majority, all state legislatures will have to ratify them.
After that the actual GST Bill will be tabled to be discussed and passed in both the houses of Parliament. The state legislatures will have to table their own state GST bills and at least half of the states will be required to pass the bills.
Only after this lengthy process will the GST come into force. The current deadline is April 1, 2016
The launch of Goods and Services Tax (GST) has been in limbo for about seven years because of states' concerns about revenue losses on introduction of the new tax regime.
