SKP Group
SKP GST Update
9 August 2016 | Issue 19
 122nd CAB passed by Lok Sabha, bringing GST a step closer to implementation
 
The (Amended) 122nd Constitutional Amendment Bill (CAB) for Goods and Services Tax (GST) was unanimously re-adopted by the Lok Sabha (Lower House of Parliament) on 8 August, 2016. The Lok Sabha actively debated on all the amendments proposed by the Rajya Sabha (Upper House of Parliament) on CAB and unanimously adopted all the amendments i.e. omission of 1% additional tax, compensation for States and Consolidated Fund of India etc. along with others as proposed by the Upper House.
 
Given that the ruling party enjoys a considerable majority of over two third in the Lok Sabha, the passage of the CAB was not expected to be difficult. However, the CAB was still debated on the floor of Lok Sabha. During the debate the Congress party reiterated its stand on rate capping. Also, having gauged that GST would soon become a reality, the opposition advised the government to leverage the experience of Malaysia while implementing GST. The opposition suggested that, India could also introduce an Anti-Profiteering Act (like in Malaysia) which could counter the temporary inflation, if any, in the short run post implementation.

 The Prime Minister in his address made a special note that the GST will act as a catalyst to optimise man, machine, material, money and minutes, thus making GST one among the most crucial economic drivers in India.

The 122nd CAB’s passage through the Lok Sabha finally marked the end of its journey through the central Parliamentary Houses. The CAB will now have to be ratified by at least 50% of the State Governments and Union territories with Legislature after which it will require a Presidential assent to become a Law.
 
SKP's comments
According to India’s Revenue Secretary Hasmukh Adhia, the government intends on getting the CAB ratified by at least 50% of the States within 30 days or less. Some States have already agreed to ratify the CAB at the earliest, even if they are required to conduct a special session for this CAB.
 
The onus is now on the government to ensure that the final GST Bill’s (IGST Act, CGST Act and SGST Act) are introduced in the Parliament and State assemblies during the next winter session itself. Furthermore, the decision of introducing the GST Bill either as a Money Bill or as a Finance Bill will also prove to be very crucial, as far as the overall passage of the GST Bill is concerned.

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