important basics details of GST

Posted on 11-09-2016        By ADMIN

important basics details of GST

Now a days in and out we are listening that consitution amendment bill has been passed by Parliament and President has also given his assent on the same. . This has triggered one question in my mind that

Why Consitutional Amendment is basically required or is a basic condition to be fulfilled for introduction of GST in India?

I am trying to clear this by way of following answer..

Answer : There is a demarcation of power to tax between the Centre and States which is presently given in the Constiution of India. The seventh schedule of Constitution contains three lists viz. Union List, State List and Concurrent List.. In keeping view these lists, you will come accroos with the inference that while the Centre is empowered to tax services in form of service tax and goods upto the manufacture/production stage in the form of leving of Excise duty, on the other hand States have the power to tax sale of goods in form of sales tax. In other words, we can say that the States do not have the powers to levy a tax on supply of services while the Centre does not have power to levy tax on the sale of goods. Thus, the Constitution does not vest express power either in the Central or State Government to levy a tax on the ‘supply of goods and services’ simultaneoulsy at one time by both the Government. This is anyway hampering the taxation in fedral structure in India. Therefore, it is essential to have Constitutional Amendments for empowering the Centre to levy tax on sale of goods and States for levy of service tax and tax on imports and other consequential issues.

Hope this is much useful to the readers

CA Alok Kaushik

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