The Union Cabinet on Thursday gave its nod to the much-awaited legislation for the Goods and Services Tax (GST). The Cabinet headed by Prime Minister Narendra Modi cleared the Constitutional Amendment Bill on GST, paving way for introducing the legislation for long-pending indirect tax reforms in the ongoing Winter Session of Parliament.
The Government is keen to roll out GST from April 1, 2016. First mooted by then Finance Minister P Chidambaram in the 2006-07 Budget, the GST Bill was scheduled to be introduced by April 1, 2010. However, launch of GST was delayed as several States expressed concerned about their revenue losses after introduction of a new tax regime. States, which earn over 50 per cent of their revenues from taxes on petrol and other petro products, wanted them to be out of GST so they could continue with levying different tax rates on these products.
The NDA Government has worked out a new formula and decided to keep petroleum out of the proposed GST in return for States agreeing to entry tax being subsumed in the new indirect tax regime.
The GST will subsume most of the indirect taxes like excise duty and service tax at the Central level and VAT and local levies on the States front. With the States on board now, the Government is hopeful in sailing through in Parliament. The GST Bill needs to be cleared by at least half of the States, besides Parliament, before its implementation.
The GST Bill was last introduced in the lok Sabha in 2011 by the UPA Government but lapsed with the change of the Government. However, the Cabinet deferred a decision on setting up a regulator for the real estate sector. According to sources, the Cabinet discussed the Real Estate Development and Regulation Bill but deferred a decision on it.
The Bill, which was introduced in the Rajya Sabha in August last year, seeks to protect home buyers from unscrupulous developers. It was then referred to a Parliamentary Standing Committee, which had submitted its report in February.
The Bill provides for mandatory registration of all projects, besides mandatory disclosure of information like details of promoters, layout plan, land status, schedule of execution, status of various approvals and carpet area.