Tags : GS Prelims Paper 1 GS Mains Paper 3 Prelims Facts Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc. Indian Economy and issues relating to planning, mobilization, of resources, growth, development, and employment Banking and Finance
  • The idea of moving towards GST was first mooted by the then Union Finance Minister in his Budget speech for 2006-07.
  • In order to implement GST, Constitutional (122nd Amendment) Bill (CAB for short) was introduced in the Parliament and passed by Rajya Sabha on 03rd August, 2016 and Lok Sabha on 08th August, 2016.
  • The CAB was passed by more than 15 states and thereafter Hon’ble President gave assent to “The Constitution (One Hundred And First Amendment) Act, 2016”.
GST COUNCIL
As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A.
  • As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Centre and the States, shall consist of the following members:
    • Union Finance Minister – Chairperson
    • The Union Minister of State, in-charge of Revenue of finance.
    • The Minister In-charge of finance or taxation or any other Minister nominated by each State Government.
GST and Centre-State Financial Relations
  • Currently, fiscal powers between the Centre and the States are clearly demarcated in the Constitution.
  • The Centre has the powers to levy tax on the manufacture of goods (except alcoholic liquor for human consumption, opium, narcotics etc.) while the States have the powers to levy tax on sale of goods.
  • In case of inter-states sales, the Centre has the powers to levy a tax (the Central Sales Tax) but, the tax is collected and retained entirely by the originating States.
  • As for services, it is the Centre alone that is empowered to levy Service Tax.
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