In the event of The Constitution Day, we would like to reminiscent the One Hundred and First Amendment of the Constitution of India, officially known as The Constitution Act, 2016.In lay man language, the one that introduced Goods and Services Tax (GST) in India from 1 April, 2017.
It is a Value Added Tax (VAT) and is proposed to be a comprehensive indirect tax to be levied on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments.
The analogy to the 1996 film is with that of the last 101st dog that used to get in trouble all the time and which required some really special efforts during the rescue effort. Our constitution’s very own 101st amendment is going through a similar ordeal with its initiation by the Atal Bihari Vajpayee administration in 2000, the declaration of the target date of 1 April, 2010 by P. Chidambaram, the then Finance Minister and the introduction of several road maps, submission of various reports and then finally a First Discussion Report on the 10th of November, 2009 by the Empowered Committee of State Finance Ministers (EC).
Currently, our 101st puppy has passed through the Lok Sabha (6 May 2015), Rajya Sabha (3 August, 2016) and received its assent from President Shri Pranab Mukherjee on 8 September 2016. But has it reached home?
Not yet. First of all, the Indian GST is pretty special like the 101st puppy in the movie itself. Which means, India has adopted a dual mode of GST, where in, there are two components- one is the Central GST (CGST) and the other is the State GST (SGST)? There is another little one called the Integrated GST (IGST) which is to be levied on all inter-state supplies. These are for retail or service.
So, a product manufactured in a state will face the SGST and then when it has to be retailed in other states it will face IGST and CGST. The Octroi, entry tax, service tax, CVD, SAD, CST, VAT and the luxury tax would all be subsumed making GST the single indirect tax in India. Then there are certain aspects that are exempted under the purview of GST like, Alcoholic liquor, Aviation turbine fuel, Diesel, petrol, etc.
Due to all these peculiarities of our special GST, the state finance ministers have still not arrived on a consensus over the dual nature (although most of the states have given their ratifications). With the GST council meeting scheduled to be held again to deliberate on the feedback received by the states on the revised GST draft laws circulated to them, the 101st puppy has its home in sight.
Another hindrance on its way home is the current IT infrastructure that needs to be upgraded (hence the need of Digital India) so that the details of inward supplies and tax credit would be auto-populated based on sales details uploaded by the vendor.
So in the event of Samvidhan Divas, the great architect of the Indian constitution, late Dr. B.R. Ambedkar would have said only one thing to this puppy, ‘Hang on, All is Well’.