Topic- initial idea of what is known

March 16, 2019 General Studies

Topic- To evaluate the impact of the Goods and Services Tax (GST) on the fiscal ties between the Union and states in India.

Introduction:

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The initial idea of what is known as Goods and Services taxes was put forward in Budgetary address of 2005 by Union Finance Minister. The path was laid down for the enactment of GST on 1st April 2010. The bill couldn’t go through as it required amendments of Constitution with special majority and ratification of half of the states as it changes union and state relations. A lot of difficulties were posed in the introduction and enactment of GST as states had their reservation concerning the income they use to earn by tax collection in pre GST era and how will that be remunerated. All in all GST scrapped and subsumed around seventeen taxes on union level and state level such as (Central Excise Duty,Service Tax, Additional Duties of Excise) on central level and (. VAT, Sales Tax,Entry tax or octroi,, Luxury Tax, Purchase Tax
Taxes on lotteries, gambling ,betting etc) on state level.

Roadmap to GST

In February of year 1986 Finance Minister V.P Singh mentions about path breaking reforms in excise taxation system.
Year 2000 then PM Atal Bihari Vajpayee formulates a committee to put forth the GST Model suitable for India, committee was headed by Finance Minister of West Bengal Asim Das Gupta.
Year 2003: Vajpayee government under Vijay Kelkar formulates a task force for major tax reforms recommendation.
Year 2004: Vijay Kelkar as Chief advisor to Finance Ministry recommends GST to replace of the then present tax structure.
Year 2006: Finance Minister under UPA government P Chidambaram sets April 1, 2010 as ultimate deadline for implementation of GST. Sets up an empowered committee under finance ministry to chart out the road map for GST implementation.
Year 2008: Empowered Committee submits it report to government of India titled as “A Model and Roadmap of GST in India.”
Year 2010 February: FM starts specifies digitization of commercial taxes of center and states, to ease out the implementation of GST. Deadline of GST deferred.

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