Key Features The Bill proposes that both the Centre and States would be entitled to concurrently impose GST on the supply of goods and services within a State. Effectively, every supply of goods and services would be subjected to a Central GST (CGST) and State GST (SGST) on such intra-state supply by the jurisdictional State. When the supply of goods and services is between States as an inter-state transaction, a levy called Integrated Goods and Services Tax (IGST) would be levied by the Centre. Imports is intended to be treated at par with inter-state transactions and therefore should attract IGST; it is currently unclear if such IGST would apply in complete exclusion to the current customs duty regime. Similarly, exports have not been given similar treatment. Therefore, the modus of imposing export duties on certain items is unclear. The Bill empowers the formulation of principles to determine when the supply of goods and services would constitute an inter-State transaction for IGST to apply; such principles would be incorporated in the GST legislation that would be introduced after this Bill becomes law. Though IGST on inter-state supply of goods and services would be imposed by the Central Government, IGST Revenues would be shared between the Centre and States as per the recommendations of the GST Council. It is expected that the methodology of this revenue share would be coded into the GST legislation that would be introduced by the Centre after completion of this constitutional amendment. As indicated above, revenue sharing between the Centre and States has been a historic stumbling block on progress on GST over the past few years. Effectively, this resulted in concern by the States on relinquishing the power to tax revenue leading items such as petroleum, tobacco, medicinal and toilet preparations (MTP) and alcohol. This Bill indicates a level of agreement on these elements, as it proposes to bring all items except alcohol within the ambit of GST. However, the Bill also provides that for certain items, this transition to GST would be immediate, while on a phased for other items.History:In 2000, theVajpayee Governmentset up a committee headed byAsim Dasgupta, the (Finance Minister of theGovernment of West Bengal) to design a model for GST and oversee IT preparations.[6][7]An announcement[citation needed]was made byPalaniappan Chidambaram, the Union Finance Minister, during the central budget of 20072008 that GST would be introduced from April 1, 2010 and that the Empowered Committee of State Finance Ministers, on his request, would work with the Central Government to prepare a road map for introduction of GST in India.After this announcement, the Empowered Committee of State Finance Ministers decided to set up a Joint Working Group on May 10, 2007, with the Adviser to the Union Finance Minister and the Member-Secretary of Empowered Committee as co-convenors and the concerned Joint Secretaries of the Department of Revenue of Union Finance Ministry and all Finance Secretaries of the states as its members[citation needed]. The Joint Working Group, after intensive internal discussions as well as interaction with experts and representatives of Chambers of Commerce and Industry, submitted its report to the Empowered Committee on November 19, 2007.This report was then discussed in detail in the meeting of Empowered Committee on November 28, 2007[citation needed]. On the basis of this discussion and the written observations of the states, certain modifications were made, and a final version of the views of Empowered Committee at that stage was prepared and was sent to theGovernment of India(April 30, 2008). The comments[citation needed]of the Government of India were received on December 12, 2008 and were duly considered by the Empowered Committee (December 16, 2008).

Why GST?GST is expected to be a critical reform in spurring growth in the economy. When introduced, GST will not only make the tax system simpler, but will also help in increased compliance, boost tax revenues, reduce the tax outflow in the hands of the consumers and make exports competitive. It is hoped that the new Government will set forth a roadmap of the GST implementation in the upcoming Budget. The GST or the Goods and Service Tax is a long pending indirect tax reform which India has been waiting for, and which is hoped to iron out the wrinkles in the existing tax system. This comprehensive tax policy is expected to be one of the most important reforms in contributing to the India growth story. To begin with, the GST is a value added tax to be levied on both goods and services (except for a list of exempted goods and services), at both the centre and state level (Central GST and State GST respectively). This is a single tax which will be levied on the product or service which is sold. In other words, multiple taxes like CENVAT, central sales tax, state sales tax, octroi, etc will not exist and will be replaced by GST. This comprehensive tax covers all stages from manufacture to sale. The tax will be levied only on the value added at each stage of the life cycle. The GST, as mentioned above is an indirect tax and will be borne by the customer. There will be a standard rate of GST across various goods and services, which could broadly be in line with international rates. World over, GST has been implemented in over 150 countries. You may wonder why this tax reform is so important for the country and how it will help the common man. Heres how: Simpler tax structure: As multiple taxes on a product or service are eliminated and a single tax comes into place, the tax structure is expected to be much simpler and easier to understand. Paperwork will become simpler and there will be a reduction in accounting complexities for businesses. A simple taxation regime can make the manufacturing sector more competitive and save both money and time. Experts opine that the implementation of GST would push up GDP by 1%-2%. Increased tax revenues: A simpler tax structure can bring about greater compliance, thus increasing the number of tax payers and in turn tax revenues for the Government. The current state of the Indian economy demands fiscal consolidation and reduction in fiscal deficit. A recent report by CRISIL states that GST is the countrys best bet to achieve fiscal consolidation. As there is not much scope to reduce Government expenditure, increasing tax revenues is the best alternative to improve the fiscal health. Competitive pricing: GST will eliminate all other forms of indirect taxing. This will effectively mean that the tax paid by the final consumer will come down in most cases. Lower prices will help in boosting consumption, which is again beneficial to companies. The biggest positive of GST is that goods and services will be taxed on a common basis. Boost to exports: When the cost of production falls in the domestic market, Indian goods and services will be more price-competitive in foreign markets. This can bode well for exporters, who compete with manufacturers abroad facing a lower cost structure. The exact rate of tax levied under GST will obviously be clear only when the final announcement will be made. Irrespective of the tax rate, it is logical and apparent from examples of other countries, that GST is a critical reform needed for the country. However, many state Governments are not in favour of this move, as it will result in a fall in their tax revenues. Arriving at a suitable formula to solve this problem, making constitutional changes and considering all the dynamics in the economy has resulted in a considerable delay in GSTs implementation. The CRISIL report states that at best, only a partial rollout of GST will be possible by the Government in the next financial year. The majority win by the ruling party in the recent elections has given a renewed hope that such important structural reforms will be brought into place without much delay. It is hoped fervently by the industry that Budget 2014 will spell out some solid measures and give a roadmap to the implementation of the GST. - See more at: http://www.moneycontrol.com/master_your_money/stocks_news_consumption.php?autono=1115265#sthash.IxSgaz7k.dpuf