BASIC CONCEPTS OF GST (PART- 13) - Constitutional Amendment for GST

[Dr. Sanjiv Agarwal]

What is proposed Constitutional Amendment

A newly inserted article 246A in the Constitution shall provide for special provision with respect to GST. According to the Bill, the following important clauses of the Bill are worth noting:

1. Clause 246A

The Legislature of every State shall have power to make laws with respect to goods and services tax imposed by the Union or by such State. Parliament will have exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.

2. Clause 269A

• Goods and services tax on supplies in the course of inter-State trade or commerce shall be levied and collected by the government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council.
• Supply of goods or services, or both in the course of import into the territory of India shall be deemed to be supply of goods or services, or both in the course of inter-state trade or commerce.
• Parliament may, by law, formulate the principles for determining the place of supply, and when a supply of goods or of services, or both takes place in the course of inter-state trade or commerce.

3. Clause 279A

The President shall, within sixty days from the date of commencement of the Constitution (One Hundred and Twenty-second Amendment) Act, 2014, by order, constitute a Council to be called the Goods and Services Tax Council.

4. Clause 279A

The Goods and Services Tax Council shall make recommendations to the Union and the States on-

1. the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the goods and services tax;
2. the goods and services that may be subjected to, or exempted from the goods and services tax;
3. model Goods and Services Tax Laws, principles of levy, apportionment of integrated Goods and Services Tax and the principles that govern the place of supply;
4. the threshold limit of turnover below which goods and services may be exempted from goods and services tax;
5. the rates including floor rates with bands of goods and services tax;
6. any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster;
7. special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur; Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and

(h)   any other matter relating to the goods and services tax, as the Council may decide.

What will the Goods & Service Tax Council do

Apart from aforementioned recommendations, GST Council shall undertake the following-

1. The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel. While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market for goods and services.
2. The Goods and Services Tax Council shall determine the procedure in the performance of its functions.
3. The Goods and Services Tax Council may decide about the modalities to resolve disputes arising out of its recommendations.

Meaning of Goods / Services / GST

The amendment Bill defines these terms-

• "goods" includes all materials, commodities, and articles; [article 366 (12)]
• "services" means anything other than goods: [article 366 (26A)]
• "goods and services tax" means any tax on supply of goods or services or both except taxes on the supply of the alcoholic liquor for human consumption; [article 366 (12A)]

'Goods' and 'Services' are otherwise defined in other enactments such as Central Excise Act, 1944, Sale of Goods Act, 1930, The Finance Act, 1994 (Service Tax) etc.

(To be continued ……)

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