A REVAMP 17 YEARS IN THE MAKING

India is all set to keep its July 1 date with the Goods and Services Tax (GST), a reform that has been in the making for 17 years. GST will unify India into one market place with one uniform tax, shore up government revenue and is expected to spur economic growth.

Timeline of the long journey to GST rollout:

2000

Vajpayee government started discussion on GST by setting up an expert panel headed by Asim Dasgupta, former West Bengal finance minister

2003

The Kelkar Task Force suggested the need to have a comprehensive indirect tax reform through GST

2006

UPA finance minister P Chidambaram proposes GST in his Union budget. The Empowered Committee (EC) of state finance ministers was assigned the responsibility to chalk out a road map for its implementation

2008

Empowered Committee submits a report ‘A Model and Roadmap for GST in India’

2009

The EC after holding discussions with the Centre and the states submits the first discussion paper

2011

Constitution Amendment bill introduced in Lok Sabha and referred to the Standing Committee on Finance for scrutiny

2013

Standing Committee submits its report to Parliament. But UPA government fails to take the legislation forward. The bill lapses with the dissolution of the Lok Sabha

2014

Finance minister Arun Jaitley introduces the Constitution (122nd Amendment) Bill, 2014 in Lok Sabha on December 19

2015

Jaitley in his budget speech sets GST rollout deadline on April 1, 2016. Lok Sabha approves the bill on May 6. The Congress demands capping GST rate at 18%. The NDA government fails to get it passed in Rajya Sabha

2016

Centre and states agree on Constitution Amendment Bill without a cap on the rates. The bill is approved by the RS on August 2016. The amended bill is passed in the LS on August 8 The GST Council headed by the Union finance minister is formed. The council decided on a four-slab rate GST structure of 5%, 12%, 18% and 28%. The ‘sin’ or “demerit” products such as tobacco items, aerated drinks and luxury cars, would come under the highest tax slab and may attract a cess, which could raise the tax burden to 40%

2017

The date for the implementation of the new tax structure is shifted to July 1, 2017, as the Centre and states took time to finalise the draft bills— CGST, IGST, SGST and UT-GST

May: GST Council during its meet in Srinagar fixes rates of goods and services