Union Cabinet approves key changes in GST Constitutional Amendment Bill
Q. GST bill has undergone how many amendments by the Union Cabinet in July 2016 to pave the way for its smooth passage in the RS?- Published on 29 Jul 16a. 2
b. 3
c. 4
d. 5
ANSWER: 2
Paving the way for more efficient passage of the GST Constitutional Amendment Bill in the RS, Union Cabinet on 27th July 2016 approved 2 key changes to the Bill addressing the concerns of the Opposition and the state governments.
- Cabinet removed from the Bill the contentious provision for one percent additional tax levy by manufacturing states
- An introduction of 100 percent compensation to States for 5 year also made good any revenue loss incurred by them due to the introduction of the GST tax.
- Decision follows the meeting of the Empowered Committee of State Finance Ministers with the Union Finance Minister Arun Jaitley where the States agreed that one percent additional levy should be removed from the Bill and it was also agreed during the meeting to include the 100 percent compensation formula for first 5 years for implementation of GST in the Bill.
- There was no consensus on whether the GST rate should be included in the Bill.
- Centre had earlier planned to compensate the States for any revenue loss due to the GST which will replace the current indirect tax regime in a manner that is phased.
- This means 100 percent compensation in the first 3 years, 75 percent in the fourth year and 50 percent during the fifth year.
