Sunday, 13 March 2016



Presented By:
CA. Puneet Goyal 


  • The first phase of reform of indirect taxation occurred when the Modified Value Added Tax (MODVAT) was introduced for selected commodities at the central level in 1986, and then gradually extended to all commodities through Central Value Added Tax (CENVAT).
  • The introduction and integration of service tax into CENVAT deepened this effort.
  • Reform at the state level occurred through introduction of Value Added Tax (VAT) by all the states in the country in a phased manner between April 2003 and January 2008.
  • Buoyed by the success of VAT, and mindful of the need for further improvement, the Government of India (GoI) indicated in Feb 2007 that a roadmap for introduction of destination-based GST in the country by 1 April 2010 would be prepared in consultation with the Empowered Committee (EC) of state Finance Ministers.
  • Earlier, the Constitution (115th Amendment) Bill, 2011, also in relation to the introduction of GST was introduced in the Lok Sabha on March 11, 2011.
  • The Bill was referred to the Standing Committee on Finance on March 29, 2011. The Standing Committee submitted its report on the Bill in August 2013.
  • However, the Bill, which was pending in the Lok Sabha, lapsed with the dissolution of the 15th Lok Sabha. 
  • The Constitution (122nd Amendment) Bill, 2014 was introduced in the Lok Sabha on December 19, 2014.
  • It seeks to amend the Constitution to introduce the goods and services tax (GST), and impose concurrent powers on the centre and states to do so.
  • The Select Committee constituted to examine the Constitution (122nd Amendment) Bill, 2014 submitted its report to Rajya Sabha on July 22, 2015.
  • The Bill was passed in Lok Sabha on May 5, 2015, and referred to the Select Committee of Rajya Sabha for examination.

B. Introduction to Goods and Service Tax

  • Goods and Service Tax (GST) is a comprehensive tax on supply of goods or services or both.
  • It eliminates the cascading effect of taxes as it is taxed at every point of business and the input credit is available in the value chain.
  • It is also known as Value  Added Tax in some countries as in the Europe Union.
  • The uninterrupted credit in the supply chain ensures that the end consumer purchases goods and services at a lower rate as there is no tax on tax and the end consumer bears the tax burden.

C. Effect of GST

In India, taxes will be levied by the CG and SG, due to this, India
has adopted Dual GST . In Dual GST, we are having only four taxes
under GST:
- Central Goods and Service Tax
- State Goods and Service Tax
- Inter State Goods and Service Tax

- Additional Tax

D. Challenges in Implementation of GST

  • Support of Left
  • Training of team
  • Contract Renegotiation
  • IT System
  • Integration issue between CG and SG
E. Disclaimer  I hope above article is useful for you. Your valuable feedback in respect of same would be highly appreciated.(Disclaimer: The above analysis has been drafted as per various provisions of Constitution of India, and notifications and circulars issued thereunder. The analysis may not be entirely correct for reader to reader due to different interpretations by different readers. The readers are advised to take into the consideration the prevailing legal position before acting on any of the comments in this reply. We shall not be responsible for any loss caused based on this interpretation.)

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