GST Legislative Framework Overview

Legislative Framework of GST in India

• Single legislation for Central Goods and Services Tax (CGST) is outlined in the CGST Act, 2017.
• Union Territories without legislatures, like Andaman and Nicobar Islands and Chandigarh, are governed by the UTGST Act, 2017 for levying Union Territory Goods and Services Tax (UTGST).
• States and Union Territories with their own legislatures (e.g., Delhi, Jammu and Kashmir, Puducherry) have their own State GST (SGST) laws.
• CGST and UTGST are imposed on the supply of goods and services in Ladakh, while CGST and SGST are applicable in Delhi.
• Despite different SGST legislations, core law features remain uniform: chargeability, taxable events, taxable persons, classification, and tax collection procedures to maintain the essence of dual GST.

Classification of Goods and Services

• Goods are classified using the Harmonised System of Nomenclature (HSN).
• Rate Schedules for goods refer to chapters in the First Schedule of the Customs Tariff Act, 1975.
• A new classification scheme for services categorizes various types under sections, headings, and groups.
• Services Accounting Code (SAC) is used for classification of services analogous to HSN for goods.

Genesis of GST in India

• The concept of GST was proposed in 2000 by the then Prime Minister and a committee was established for its design.
• In 2004, a task force recommended a fully integrated national GST.
• The Union Budget for 2006-2007 announced the introduction of GST from April 1, 2010, but implementation faced delays.
• In 2014, the NDA Government introduced the Constitution (122nd Amendment) Bill for GST in Parliament.
• The Bill was passed by the Lok Sabha in May 2015 and by the Rajya Sabha in August 2016.
• Ratification by over 50% of states led to Presidential assent on September 8, 2016, amending the Constitution with the 101st Amendment Act, 2016.
• On March 27, 2017, key Central GST legislations were introduced in Lok Sabha, followed by assent from the President on April 12, 2017.

Constitutional Provisions Related to GST

• Article 246A provides Parliament the power to legislate GST in the national interest or during emergencies.
• Article 249 allows Parliament to legislate matters in the State List if declared in national interest by two-thirds majority in the Council of States.
• Article 250 permits laws on State List matters if a state of emergency is in effect.
• Amendments to Articles 249 and 250 grant Parliament additional legislative power specifically concerning GST.

Article 268

• Article 268 deals with duties levied by the Centre but collected by States.
• It states the Centre levies specified duties (e.g., stamp duties and excise on medicinal and toilet preparations) while States collect them, except in Union Territories.
• The Constitution Amendment omitted certain duties from Article 268.

Transitional Provisions and Taxation

• Transitional provisions address inconsistencies in existing tax laws regarding goods and services in any State.
• Taxes will remain in effect until amended, repealed, or for one year post-GST commencement, whichever comes first.

Tax Levies Quiz

• Tobacco is leviable under:
  • GST on supply
  • Central excise duty on manufacture
• Opium and Indian hemp are leviable under:
  • GST on supply
  • Central excise duty on manufacture

Introduction of GST in India

• Concept of GST was proposed by the Prime Minister in 2000, leading to the formation of a committee to design the model.
• A task force recommended a fully integrated GST on a national basis in 2004.
• Original introduction date was set for April 1, 2010, but several deadlines were missed.

Development Timeline

• 2014: NDA Government introduced the Constitution (122nd Amendment) Bill in Parliament.
• 2015: Lok Sabha passed the Bill on May 6; Rajya Sabha on August 3.
• 2016: Bill ratified by over 50% of States; presidential assent granted on September 8, becoming Constitution (101st Amendment) Act, 2016.
• 2017: Central GST legislations were introduced and enacted.

Constitutional Amendments for GST

• Constitution needed amendments for integrating various taxes (central excise, State VAT, service tax).
• Constitution (101st Amendment Act, 2016) includes 20 sections and established Article 279A, empowering the President to form the GST Council.
• Compensation to States for revenue loss due to GST implementation is mandated by Parliament.

Key Provisions of Constitution (101st Amendment) Act, 2016

• Parliament and State Legislatures have concurrent powers to legislate on goods and services tax.
• Integrated goods and services tax (IGST) is levied on inter-State transactions managed by the Central Government.
• Parliament will form principles for determining the place of supply in inter-State trade through legislation.

Explore the legislative framework surrounding the Goods and Services Tax (GST) in India. This quiz covers key aspects of the CGST Act, 2017, and the UTGST Act, 2017, and demonstrates how different regions are governed by their respective legislation. Test your understanding of GST across states and union territories.