Cabinet approval paves way for presentation of GST bill in Lok Sabha

The Dollar Business Bureau

The Goods and Services Tax (GST) legislation is fast gaining momentum as the Union Cabinet approved all the four draft GST bills on Monday. The final draft will be presented in the parliament later this week.

The four supporting GST laws – CGST (Central GST), SGST (State GST), IGST (Integrated GST) and UTGST (Union Territory GST) passed the big test of cabinet approval with flying colours, emerging successful in bringing the law one step closer to implementation.

The Union Cabinet headed by Prime Minister Narendra Modi has approved the bills. Earlier, the given four bills have been cleared by the GST Council after thorough discussion in 12 meetings of the Council, which were held in the past six months.

The compensation bill, drafted to compensate states for loss in tax revenue due to GST, also received a nod from the Cabinet.

The fast-paced bureaucratic progress, even as the GST Council attempts to accommodate industry concerns, indicates that the government will meet the July 1 deadline for rolling out the new tax regime.

Due to the interlinked nature of all these bills, they will be tabled for discussion in the parliament together as money bills. The incumbent party hopes for a speedy and smooth passing of the bill, so that the next phase of classifying various goods and services in the proposed four different tax brackets can be commenced.

The status of a 'money bill' limits the intervention of Rajya Sabha, the upper house of the Parliament, where the opposition enjoys a majority. Since the decision is now solely in the hands of Lok Sabha, where National Democratic Alliance (NDA) has a majority, there are no substantial bottlenecks in sight for a smooth clearance.

Rajya Sabha only makes 'suggestions' which may or may not be implemented, and in case, if it does not revert on the bill to the lower house within 14 days, the bill will be automatically passed.

The much talked-about tax regime has so far been hailed as a singular decisive reform which will remove inter-state tax barriers and rid the economy of the burden of cascading tax, integrating national trade and altering prices of goods and services favourably. But the peak moment of anticipation has finally arrived, as the public presentation of the bill will allow stakeholders to analyse the fine print and estimate ground implications in detail.

The government will extensively support industry and the trading fraternity in understanding and implementing the new rules, during the three-month gap between the passage and nation-wide roll-out of GST. However, some industrial bodies have demanded a delayed date of roll-out due to inadequate time for small traders to adapt to a digitalised taxation system.

In any case, timely roll-out of the bills makes it imperative for the bill to be passed without any more delay.