ORIGIN OF GST LAW IN INDIA

/ Abott Law Office

The idea of moving towards the GST was first mooted by the then Union Finance Minister (Mr. P. Chidambaram) in his Budget for 2006-07. It was to be introduced from April 01, 2010.

  • February 2006: Mr. P. Chidambaram, the then Finance Minister, stated that the government’s medium-to-long-term objective was to adopt a unified GST structure across the country, spanning the whole production-distribution chain. This was addressed at the budget session for the 2006-07 financial year and April 1, 2010 was decided as the GST introduction date. The Empowered Committee of State Finance Ministers (“EC”), which had formulated the design of State VAT was requested to come up with a roadmap and structure for GST.
  • July 2009: The GST system’s fundamental structure was revealed by India’s then Finance Minister, Mr. Pranab Mukherjee.
  • November 2009: The EC, led by Mr. Asim Dasgupta, released the First Discussion Paper (FDP), which described the proposed GST regime. The document was supposed to spark a discussion that would result in further input from stakeholders.
  • March 2011: The Congress Government proposed the Constitution (115thAmendment) Bill to implement GST. Due to the opposition protests, the Bill was sent to a standing committee for further review.
  • 2014: Unfortunately, the Bill to amend the Constitution was expired. Shri Narendra Modi was elected as the Prime Minister of India in the same year. Late Mr. Arun Jaitley, (India’s Finance Minister in NDA Government), introduced the Constitution (122ndAmendment) Bill, 2014 in the Lok Sabha.
  • May 2015: The Constitution 122ndAmendment Bill, 2014 was passed by the Lok Sabha on May 06, 2015. The Bill was then referred to the Select Committee of Rajya Sabha on May 12, 2015.
  • While considering the Bill, the Select Committee took note of the following documents / papers placed before it: –

(a) The Constitution (One Hundred & Twenty-Second Amendment), Bill, 2014 as passed by the Lok Sabha on May 06, 2015;

(b) Background Note on the Bill furnished by the Ministry of Finance (Department of Revenue);

(c) Information/Papers on the Bill furnished by the Ministry of Law and Justice (Legislative Department);

(d) Background note on the Bill furnished by the Ministry of Urban Development;

(e) Background Note on the Bill furnished by the Ministry of Panchyati Raj;

(f) Memoranda furnished by the State Governments;

(g) Memoranda furnished by the Experts/other Stakeholders; and

(h) Replies to Memoranda no. 1-58 furnished by Ministry of Finance (Department of Revenue)

  • July 2015: The Select Committee scheduled various meetings (May 22, 2015, May 29, 2015 and June 16, 2015) and finally submitted its Report on the Bill on July 22, 2015.
  • August 2016: The government’s proposal on the four main changes to the Bill was eventually accepted by the Congress-led opposition. The Rajya Sabha passed the bill on August 03, 2016. Further, the Lok Sabha passed the GST Bill on August 08, 2016.
  • September 2016: The Hon’ble President of India gave assent on September 08, 2016, which became “The Constitution (One Hundred and First Amendment) Act, 2016. The 1st GST Council Meeting was held in 2016 (September 22nd & 23rd 2016) under the Chairpersonship of the then Hon’ble Union Finance Minister, Shri Arun Jaitley in Vigyan Bhawan, New Delhi.
  • September 2016 to June 2017: The GST Council met several times and discussed model GST law, finalized the important CGST and SGST Bills, the rules on registration, return, payment, refund, debit, credit, and invoices got approval and he major decision of GST roll out on July 01 was unanimously accepted and pending rules including returns and transition provisions approved by the GST Council.
  • June 2017: All the states passed their SGST Acts except for the state of Jammu and Kashmir.
  • July 2017: GST launched the National Tax Market on July 01, 2017. On July 08, 2017, the SGST Act was passed by Jammu and Kashmir

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