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Officially known as The Constitution (One Hundred and First Amendment) Act, 2016, this amendment introduced a national Goods and Services Tax (GST) in
India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
from 1 July 2017. It was introduced as the One Hundred and Twenty Second Amendment Bill of the
Constitution of India The Constitution of India ( IAST: ) is the supreme law of India. The document lays down the framework that demarcates fundamental political code, structure, procedures, powers, and duties of government institutions and sets out fundamental ...
, The Goods and Services Tax (GST) is a Value added Tax (VAT) proposed to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It replaces all indirect taxes levied on goods and services by the Indian Central and state governments. It is aimed at being comprehensive for most goods and services.


Background

An empowered union committee was set up by the
Vajpayee administration Atal Bihari Vajpayee (; 25 December 1924 – 16 August 2018) was an Indian politician who served three terms as the 10th prime minister of India, first for a term of 13 days in 1996, then for a period of 13 months fr ...
to streamline the GST model to be adopted and to develop the required back-end infrastructure that would be needed for its implementation. In his budget speech on 28 February 2006, P. Chidambaram, the Finance Minister, announced the target date for implementation of GST to be 1 April 2010 and formed another empowered committee of State Finance Ministers to design the road map. The committee submitted its report to the government in April 2008 and released its First Discussion Paper on GST in India in 2009. Since the proposal involved reform/ restructuring of not only indirect taxes levied by the Central but also the States, the responsibility of preparing a Design and Road Map for the implementation of GST was assigned to the Empowered Committee of State Finance Ministers (EC). In April, 2008, the EC submitted a report, titled "A Model and Road map for Goods and Services Tax (GST) in India" containing broad recommendations about the structure and design of GST. In response to the report, the Department of Revenue made some suggestions to be incorporated in the design and structure of proposed GST bill. Based on inputs from GoI and States, The EC released its First Discussion Paper on Goods and Services Tax in India on 10 November 2009 with the objective of generating a debate and obtaining inputs from all stakeholders. A dual GST module for the country has been proposed by the EC. This dual GST model has been accepted by centre. Under this model GST have two components viz. the Central GST to be levied and collected by the Centre and the State GST to be levied and collected by the respective States. Central Excise duty, additional excise duty, Service Tax, and additional duty of customs (equivalent to excise), State VAT, entertainment tax, taxes on lotteries, betting and gambling and entry tax (not levied by local bodies) would be subsumed within GST. Other taxes which will be subsumed with GST are Octroi, entry tax and luxury tax thus making it a single indirect tax in India. In order to take the GST related work further, a Joint Working Group consisting of officers from Central as well as State Government was constituted. This was further trifurcated into three Sub-Working Groups to work separately on draft legislation required for GST, process/forms to be followed in GST regime and IT infrastructure development needed for smooth functioning of proposed GST. In addition, an Empowered Group for development of IT Systems required for Goods and Services Tax regime has been set up under the chairmanship of Dr. Shruti Negi.


Legislative history

On 29 March 2017, CGST, IGST, UTGST and SGST compensation law passed in Loksabha ''The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014'' was introduced in the
Lok Sabha The Lok Sabha, constitutionally the House of the People, is the lower house of India's bicameral Parliament, with the upper house being the Rajya Sabha. Members of the Lok Sabha are elected by an adult universal suffrage and a first-p ...
by Finance Minister
Arun Jaitley Arun Jaitley (28 December 1952 – 24 August 2019) was an Indian politician and attorney. A member of the Bharatiya Janata Party, Jaitley served as the Minister of Finance and Corporate Affairs of the Government of India from 2014 to 2019. Jai ...
on 19 December 2014, and passed by the House on 6 May 2015. In the
Rajya Sabha The Rajya Sabha, constitutionally the Council of States, is the upper house of the bicameral Parliament of India. , it has a maximum membership of 245, of which 233 are elected by the legislatures of the states and union territories using si ...
, the bill was referred to a Select Committee on 14 May 2015. The Select Committee of the Rajya Sabha submitted its report on the bill on 22 July 2015. The bill was passed by the Rajya Sabha on 3 August 2016, and the amended bill was passed by the Lok Sabha on 8 August 2016. The bill, after ratification by the States, received assent from President
Pranab Mukherjee Dr. Pranab Mukherjee (11 December 193531 August 2020) was an Indian politician and statesman who served as the 13th president of India from 2012 until 2017. In a political career spanning five decades, Mukherjee was a senior leader in the India ...
on 8 September 2016, and was notified in ''
The Gazette of India ''The Gazette of India'' is a public journal and an authorised legal document of the Government of India, published weekly by the Department of Publication, Ministry of Housing and Urban Affairs. As a public journal, the ''Gazette'' prints offi ...
'' on the same date.


Ratification

The Act was passed in accordance with the provisions of Article 368 of the Constitution, and has been
ratified Ratification is a principal's approval of an act of its agent that lacked the authority to bind the principal legally. Ratification defines the international act in which a state indicates its consent to be bound to a treaty if the parties inten ...
by more than half of the State Legislatures, as required under Clause (2) of the said article. On 12 August 2016, Assam became the first state to ratify the bill, when the Assam Legislative Assembly unanimously approved it. State Legislatures that ratified the amendment are listed below: #
Assam Assam (; ) is a state in northeastern India, south of the eastern Himalayas along the Brahmaputra and Barak River valleys. Assam covers an area of . The state is bordered by Bhutan and Arunachal Pradesh to the north; Nagaland and Manipur ...
(12 August 2016) #
Bihar Bihar (; ) is a state in eastern India. It is the 2nd largest state by population in 2019, 12th largest by area of , and 14th largest by GDP in 2021. Bihar borders Uttar Pradesh to its west, Nepal to the north, the northern part of West ...
(16 August) #
Jharkhand Jharkhand (; ; ) is a state in eastern India. The state shares its border with the states of West Bengal to the east, Chhattisgarh to the west, Uttar Pradesh to the northwest, Bihar to the north and Odisha to the south. It has an area of . I ...
(17 August) # Chhattisgarh (22 August) #
Himachal Pradesh Himachal Pradesh (; ; "Snow-laden Mountain Province") is a state in the northern part of India. Situated in the Western Himalayas, it is one of the thirteen mountain states and is characterized by an extreme landscape featuring several peaks ...
(22 August) #
Gujarat Gujarat (, ) is a state along the western coast of India. Its coastline of about is the longest in the country, most of which lies on the Kathiawar peninsula. Gujarat is the fifth-largest Indian state by area, covering some ; and the ninth ...
(23 August) #
Delhi Delhi, officially the National Capital Territory (NCT) of Delhi, is a city and a union territory of India containing New Delhi, the capital of India. Straddling the Yamuna river, primarily its western or right bank, Delhi shares borders ...
(24 August) #
Madhya Pradesh Madhya Pradesh (, ; meaning 'central province') is a state in central India. Its capital is Bhopal, and the largest city is Indore, with Jabalpur, Ujjain, Gwalior, Sagar, and Rewa being the other major cities. Madhya Pradesh is the seco ...
(24 August) #
Nagaland Nagaland () is a landlocked state in the northeastern region of India. It is bordered by the Indian states of Arunachal Pradesh to the north, Assam to the west, Manipur to the south and the Sagaing Region of Myanmar to the east. Its capital cit ...
(26 August) #
Haryana Haryana (; ) is an Indian state located in the northern part of the country. It was carved out of the former state of East Punjab on 1 Nov 1966 on a linguistic basis. It is ranked 21st in terms of area, with less than 1.4% () of India's land a ...
(29 August) # Maharashtra (29 August) #
Mizoram Mizoram () is a state in Northeast India, with Aizawl as its seat of government and capital city. The name of the state is derived from "Mizo", the self-described name of the native inhabitants, and "Ram", which in the Mizo language means "lan ...
(30 August) #
Sikkim Sikkim (; ) is a state in Northeastern India. It borders the Tibet Autonomous Region of China in the north and northeast, Bhutan in the east, Province No. 1 of Nepal in the west and West Bengal in the south. Sikkim is also close to the Silig ...
(30 August) #
Telangana Telangana (; , ) is a state in India situated on the south-central stretch of the Indian peninsula on the high Deccan Plateau. It is the eleventh-largest state and the twelfth-most populated state in India with a geographical area of and 3 ...
(30 August) #
Goa Goa () is a state on the southwestern coast of India within the Konkan region, geographically separated from the Deccan highlands by the Western Ghats. It is located between the Indian states of Maharashtra to the north and Karnataka to the ...
(31 August). The amendment was subsequently ratified by: #
Odisha Odisha (English: , ), formerly Orissa ( the official name until 2011), is an Indian state located in Eastern India. It is the 8th largest state by area, and the 11th largest by population. The state has the third largest population of ...
(1 September) #
Puducherry Puducherry or Pondicherry may refer to: * Puducherry (union territory), a union territory of India ** Pondicherry, capital of the union territory of Puducherry ** Puducherry district, a district of the union territory of Puducherry ** Puducherry t ...
(2 September) #
Rajasthan Rajasthan (; lit. 'Land of Kings') is a state in northern India. It covers or 10.4 per cent of India's total geographical area. It is the largest Indian state by area and the seventh largest by population. It is on India's northwestern s ...
(2 September) #
Andhra Pradesh Andhra Pradesh (, abbr. AP) is a state in the south-eastern coastal region of India. It is the seventh-largest state by area covering an area of and tenth-most populous state with 49,386,799 inhabitants. It is bordered by Telangana to the ...
(8 September) #
Arunachal Pradesh Arunachal Pradesh (, ) is a state in Northeastern India. It was formed from the erstwhile North-East Frontier Agency (NEFA) region, and became a state on 20 February 1987. It borders the states of Assam and Nagaland to the south. It shares ...
(8 September) #
Meghalaya Meghalaya (, or , meaning "abode of clouds"; from Sanskrit , "cloud" + , "abode") is a state in northeastern India. Meghalaya was formed on 21 January 1972 by carving out two districts from the state of Assam: (a) the United Khasi Hills and J ...
(9 September) #
Punjab Punjab (; Punjabi: پنجاب ; ਪੰਜਾਬ ; ; also romanised as ''Panjāb'' or ''Panj-Āb'') is a geopolitical, cultural, and historical region in South Asia, specifically in the northern part of the Indian subcontinent, comprising a ...
(12 September) #
Tripura Tripura (, Bengali: ) is a state in Northeast India. The third-smallest state in the country, it covers ; and the seventh-least populous state with a population of 36.71 lakh ( 3.67 million). It is bordered by Assam and Mizoram to the ea ...
(26 September) #
Uttarakhand Uttarakhand ( , or ; , ), also known as Uttaranchal ( ; the official name until 2007), is a state in the northern part of India. It is often referred to as the "Devbhumi" (literally 'Land of the Gods') due to its religious significance and ...
(2 May 2017) #
Uttar Pradesh Uttar Pradesh (; , 'Northern Province') is a state in northern India. With over 200 million inhabitants, it is the most populated state in India as well as the most populous country subdivision in the world. It was established in 1950 ...
(16 May) #
Tamil Nadu Tamil Nadu (; , TN) is a state in southern India. It is the tenth largest Indian state by area and the sixth largest by population. Its capital and largest city is Chennai. Tamil Nadu is the home of the Tamil people, whose Tamil language ...
(19 June) #
West Bengal West Bengal (, Bengali: ''Poshchim Bongo'', , abbr. WB) is a state in the eastern portion of India. It is situated along the Bay of Bengal, along with a population of over 91 million inhabitants within an area of . West Bengal is the fou ...
(8 August) #
Karnataka Karnataka (; ISO: , , also known as Karunāḍu) is a state in the southwestern region of India. It was formed on 1 November 1956, with the passage of the States Reorganisation Act. Originally known as Mysore State , it was renamed ''Karnat ...
(16 June) #
Kerala Kerala ( ; ) is a state on the Malabar Coast of India. It was formed on 1 November 1956, following the passage of the States Reorganisation Act, by combining Malayalam-speaking regions of the erstwhile regions of Cochin, Malabar, South ...
(21 June) #
Manipur Manipur () ( mni, Kangleipak) is a state in Northeast India, with the city of Imphal as its capital. It is bounded by the Indian states of Nagaland to the north, Mizoram to the south and Assam to the west. It also borders two regions of ...
(5 June) # Jammu and Kashmir (5 July)


See also

*
Goods and Services Tax (India) Goods and Services Tax (GST) is an indirect tax (or consumption tax) used in India on the supply of goods and services. It is a comprehensive, multistage, destination-based tax: comprehensive because it has subsumed almost all the indirect taxe ...
*
Goods and Services Tax (Australia) Goods and Services Tax (GST) in Australia is a value added tax of 10% on most goods and services sales, with some exemptions (such as for certain food, healthcare and housing items) and concessions (including qualifying long term accommodati ...
* Goods and Services Tax (Canada) * Goods and Services Tax (Hong Kong) *
Goods and Services Tax (Malaysia) The Goods and Services Tax (GST) is an abolished value-added tax in Malaysia. GST is levied on most transactions in the production process, but is refunded with exception of Blocked Input Tax, to all parties in the chain of production other th ...
*
Goods and Services Tax (New Zealand) Goods and Services Tax (GST) is a value-added tax or consumption tax for goods and services consumed in New Zealand. GST in New Zealand is designed to be a broad-based system with few exemptions, such as for rents collected on residential rental ...
*
Goods and Services Tax (Singapore) Goods and Services Tax (GST) in Singapore is a broad-based value added tax levied on import of goods, as well as nearly all supplies of goods and services. The only exemptions are for the sales and leases of residential properties, importation and ...


Notes


References

{{reflist, 30em


External links


GST GOV

GST LAW
Taxation in India
India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
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