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AS INTRODUCED IN LOK SABHA Bill No. 192 of 2014 THE CONSTITUTION (ONE HUNDRED AND TWENTY-SECOND AMENDMENT) BILL, 2014 A BILL further to amend the Constitution of India. BE it enacted by Parliament in the Sixty-fifth Year of the Republic of India as follows:- Short title and commencement. 1. (1) This Act may be called the Constitution (One Hundred and Twenty-second Amendment) Act. 2014. (2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the commencement of that provision. Insertion of new article 246A. 2. After article 246 of the Constitution, the following article shall be inserted, namely:- Special provision with respect to goods and services tax.
Amendment of article 248. 3. In article 248 of the Constitution, in clause (1), for the word "Parliament", the words, figures and letter "Subject to article 246A, Parliament" shall be substituted. Amendment of article 249. 4. In article 249 of the Constitution, in clause (1), after the words "with respect to", the words, figures and letter" goods and services tax provided under article 246A or" shall be inserted. Amendment of article 250. 5. In article 250 of the Constitution, in clause (1), after the words "with respect to", the words, figures and letter "goods and services tax provided under article 246A or" shall be inserted. Amendment of article 268. 6. In article 268 of the Constitution, in clause (1), the words "and such duties of excise on medicinal and toilet preparations" shall be omitted. Omission of article 268A. 7. Article 268A of the Constitution, as inserted by section 2 of the Constitution (Eighty-eighth Amendment) Act. 2003 shall be omitted. Amendment of article 269. 8. In article 269 of the Constitution, in clause (1), after the words "consignment of goods", the words, figures and letter "except as provided in article 269A" shall be inserted. Insertion of new article 269 A. 9. After article 269 of the Constitution, the following article shall be inserted, namely:- Levy and collection of goods and services tax in course of inter-State trade or commerce.
Amendment of article 270. 10. In article 270 of the Constitution,-
Amendment of article 271 11. In article 271 of the Constitution, after the words "in those articles", the words, figures and letter "except the goods and services tax under article 246A," shall be inserted. Insertion of new article 279A. 12. After article 279 of the Constitution, the following article shall be inserted, namely:- Goods and Services Tax Council.
Amendment of article 286. 13. In article 286 of the Constitution,-
Amendment of article 366. 14. In article 366 of the Constitution.-
Amendment of article 368. 15. In article 368 of the Constitution, in clause (2). in the proviso, in clause (a), for the words and figures "article 162 or article 241". the words, figures and letter "article 162, article 241 or article 279A11 shall be substituted. Amendment of Sixth Schedule. 16. In the Sixth Schedule to the Constitution, in paragraph 8, in sub-paragraph (3),-
Amendment of Seventh Schedule. 17. In the Seventh Schedule to the Constitution,-
Arrangement for assignment of additional tax on supply of goods to Slates for two years or such other period recommended by the Council. 18. (1) An additional tax on supply of goods, not exceeding one per cent, in the course of inter-State trade or commerce shall, notwithstanding anything contained in clause (1) of article 269A, be levied and collected by the Government of India for a period of two years or such other period as the Goods and Services Tax Council may recommend, and such tax shall be assigned to the States in the manner provided in clause (2).
Compensation to States for loss of revenue on account of introduction of goods and services tax. 19. Parliament may, by law, on the recommendation of the Goods and Services Tax Council, provide for compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for such period which may extend to five years. Transitional provisions. 20. Notwithstanding anything in this Act, any provision of any law relating to tax on goods or services or on both in force in any State immediately before the commencement of this Act, which is inconsistent with the provisions of the Constitution as amended by this Act shall continue to be inforce until amended or repealed by a competent Legislature or other competent authority or until expiration of one year from such commencement, whichever is earlier. Power of President to remove difficulties. 21.(1) If any difficulty arises in giving effect to the provisions of the Constitution as amended by this Act (including any difficulty in relation to the transition from the provisions of the Constitution as they stood immediately before the date of assent of the President to this Act to the provisions of the Constitution as amended by this Act), the President may, by order, make such provisions, including any adaptation or modification of any provision of the Constitution as amended by this Act or law, as appear to the President to be necessary or expedient for the purpose of removing the difficulty: Provided that no such order shall be made after the expiry of three years from the date of such assent. (2) Every order made under sub-section (1) shall, as soon as may be after it is made, be laid before each House of Parliament. STATEMENT OF OBJECTS AND REASONS The Constitution is proposed to be amended to introduce the goods and services tax for conferring concurrent taxing powers on the Union as well as the States including Union territory with Legislature to make laws for levying goods and services tax on every transaction of supply of goods or services or both. The goods and services tax shall replace a number of indirect taxes being levied by the Union and the State Governments and is intended to remove cascading effect of taxes and provide for a common national market for goods and services. The proposed Central and State goods and services tax will be levied on all transactions involving supply of goods and services, except those which are kept out of the purview of the goods and services tax. 2. The proposed Bill, which seeks further to amend the Constitution, inter alia, provides for-
3. the Bill seeks to achieve the above objects. New Delhi; The 18th December, 2014 ARUN JAITLEY PRESIDENT'S RECOMMENDATION UNDER ARTICLE 117 OF THE CONSTITUTION OF INDIA [Copy of letter No. S-31011 /07/2014-SO(ST), dated the 18th December, 2014 from Shri Arun Jaitley. Minister of Finance to the Secretary-General, Lok Sabha.] The President, having been informed of the subject matter of the proposed Bill, recommends under clauses (1) and (3) of article 117, read with clause (1) of article 274, of the Constitution of India, the introduction of the Constitution (One Hundred and Twenty-second Amendment) Bill. 2014 in Lok Sabha and also the consideration of the Bill. FINANCIAL MEMORANDUM Clause 12 of the Bill seeks to insert a new article 279A in the Constitution relating to Constitution of Goods and Services Tax Council. The Council shall function under the Chairmanship of the Union Finance Minister and will have the Union Minister of State incharge of Revenue or Finance as member, along with the Minister in-charge of Finance or Taxation or any other Minister nominated by each State Government. 2. The creation of Goods and Services Tax Council will involve expenditure on office expenses, salaries and allowances of the officers and staff. The objective that the introduction of goods and services tax will make the Indian trade and industry more competitive, domestically as well as internationally and contribute significantly to the growth of the economy, such additional expenditure on the Council will not be significant. 3. At this stage, it will be difficult to make an estimate of the expenditure, both recurring and non-recurring on account of the Constitution of the Council. 4. Further, it is provided for compensation to the States for loss of revenue arising on account of implementation of the Goods and Services Tax for such period which may extend to five years. The exact compensation can be worked out only when the provisions of the Bill are implemented. MEMORANDUM REGARDING DELEGATED LEGISLATION Clause 12 of the Bill seeks to insert a new article 279A relating to the constitution of a Council to be called the Goods and Services Tax Council. Clause (1) of the proposed new article 279A provides that the President, shall within sixty days from the date of the 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. Clause (8) of the said article provides that the Council shall determine the procedure in the performance of its functions. 2. The procedures, as may be laid down by the Goods and Services Tax Council in the performance of its functions, are matters of procedure and details. The delegation of legislative power is, therefore, of a normal character. ANNEXURE EXTRACTS FROM THE CONSTITUTION OF INDIA
Residuary powers of legislation 248. (1) Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List.
Power of Parliament to legislate with respect to a matter in the State List in the national interest. 249. (1) Notwithstanding anything in the foregoing provisions of this Chapter, if the Council of States has declared by resolution supported by not less than two-thirds of the members present and voting that it is necessary or expedient in the national interest that Parliament should make laws with respect to any matter enumerated in the State List specified in the resolution, it shall be lawful for Parliament to make laws for the whole or any part of the territory' of India with respect to that matter while the resolution remains in force.
Power of Parliament to legislate with respect to any matter in the State List if a Proclamation of Emergency is in operation 250. (1) Notwithstanding anything in this Chapter, Parliament shall, while a Proclamation of Emergency is in operation, have power to make laws for the whole or any part of the territory of India with respect to any of the matters enumerated in the State List.
Duties levied by the Union but collected and appropriated by the States. 268. (1) Such stamp duties and such duties of excise on medicinal and toilet preparations as are mentioned in the Union List shall be levied by the Government of India but shall be collected-
Service tax levied by Union and collected and appropriated by the Union and the States. 268A. (1) Taxes on services shall be levied by the Government of India and such tax shall be collected and appropriated by the Government of India and the States, in the manner provided in clause (2).
in accordance with such principles of collection and appropriation as may be formulated by Parliament by law. Taxes levied and collected by the Union but assigned to the States. 269. (1) Taxes on the sale or purchase of goods and taxes on the consignment of goods shall be levied and collected by the Government of India but shall be assigned and shall be deemed to have been assigned to the States on or after the 1st day of April. 1996 in the manner provided in clause (2). Explanation.- For the purposes of this clause.-
Taxes levied and distributed between the Union and the States. 270. (1) All taxes and duties referred to in the Union List, except the duties and taxes referred to in articles 268, 268A and 269. respectively, surcharge on taxes and duties referred to in article 271 and any cess levied for specific purposes under any law made by Parliament shall be levied and collected by the Government of India and shall be distributed between the Union and the States in the manner provided in clause (2).
Surcharge on certain duties and taxes for purposes of the Union 271. Notwithstanding anything in articles 269 and 270, Parliament may at any time increase any of the duties or taxes referred to in those articles by a surcharge for purposes of the Union and the whole proceeds of any such surcharge shall form part of the Consolidated Fund of India.
Restrictions as to imposition of tax on the sale or purchase of goods. 286. (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place-
(2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1). (3) Any law of a State shall, in so far as it imposes, or authorises the imposition of,—
be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify.
PART XX AMENDMENT OF THE CONSTITUTION Power of Parliament to amend the Constitution and procedure therefore.
(2) An amendment of this Constitution may be initiated only by the introduction of a Bill for the purpose in either House of Parliament, and when the Bill is passed in each House by a majority of the total membership of that House and by a majority of not less than two-thirds of the members of that House present and voting, it shall be presented to the President who shall give his assent to the Bill and thereupon the Constitution shall stand amended in accordance with the terms of the Bill: Provided that if such amendment seeks to make any change in-
the amendment shall also require to be ratified by the Legislatures of not less than one-half of the States by resolutions to that effect passed by those Legislatures before the Bill making provision for such amendment is presented to the President for assent.
SIXTH SCHEDULE [Articles 244(2)and 275(1)] Provisions as to the Administration of Tribal Areas in the States of Assam, Meghalaya, Tripura and Mizoram
Powers to assess and collect land revenue and to impose taxes
(3) The District Council for an autonomous district shall have the power to levy and collect all or any of the following taxes within such district, that is to say-
(c) taxes on the entry of goods into a market for sale therein, and tolls on passengers and goods carried in ferries; and (d) taxes for the maintenance of schools, dispensaries or roads.
SEVENTH SCHEDULE (Article 246) List I- Union List
84. Duties of excise on tobacco and other goods manufactured or produced in India except-
but including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this entry
92. Taxes on the sale or purchase of newspapers and on advertisements published therein.
92C. Taxes on services.
List II-State List
52 Taxes on the entry of goods into a local area for consumption, use or sale therein.
54. Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I. 55. Taxes on advertisements other than advertisements published in the newspapers and advertisements broadcast by radio or television.
62. Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling.
LOKSABHA
A
BILL
further to amend the Constitution of India.
(Shri Arun Jaitley, Minister of Finance) |