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Goods & Service Tax (GST) is a regime of Uniform Tax. A regime in which  multiple indirect taxes will be the talk of past and indirect taxes will be subsumed in GST.

A. Taxes to be Subsumed in GST

The following taxes will be  subsumed under GST :

Central Taxes

1. Central Excise Duty,

2. Additional Excise Duties,

3. Service Tax,

4. Additional Customs Duty (CVD),

5. Special Additional Duty of Customs (SAD), etc.

State Taxes

1. Sales Tax,

2. Entertainment Tax,

3. Octroi and Entry Tax,

4. Purchase Tax and Luxury Tax,

5.  Central Sales Tax etc.

B. Bill Placed with  Proposed Changes in Constitution of India

The era of GST in India has been initiated  by  tabling of GST Bill no. 192 of 2014 in Parliament for resulting the 122th  amendment in Constitution of India . The proposed Bill has introduced and amended certain Articles of the Constitution of India so that GST can be implemented In India .

In the aforesaid bill, various Articles of Constitution were proposed to be omitted , amended alongwith introduction of new Articles as well. The most prominent are introduction of Article 246 A , 269 A & 279A .

In addition to the same , certain changes in Union  and State List under List I of Seventh Schedule to the Constitution  is also proposed by way of introduction and omission of entries so as to finally accommodate the GST in the constitution itself.

C. Proposed Articles for Empowerment , Levy & Collection of GST

The proposed Article 246A will empower the Parliament and Legislature of States  to levy tax on goods and services i.e GST

“246A(1) – Notwithstanding anything contained in articles 246 and 254, Parliament, and. subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such state.

(2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.

Explanation: – The provisions of this article, shall, in respect of goods and services tax referred to in clause (5), of article 279A, take effect from the date recommended by the Goods & Service Tax Council “

Further, another important proposed Article 269A needs to be referred which is about levy, collection, share  and point of taxation .

“269A. (1) Goods and service tax on supplies in course of inter-state trade or commerce shall be levied and collected by government of India and such tax shall be apportioned between the Union and states in the manner as may be provided by the parliament by law on recommendations of goods and service tax council.

 Explanation: – For the purpose of this clause, supply of goods, or of services, or both in course of import into the territory of India shall be deemed to be supply of goods or of services or both in course of inter-state trade or commerce.

(2) Parliament may by law, formulate the principles for the determining the place of supply, and when a supply of goods, or of services, or of both takes place in course of interstate trade or commerce.”

D. What is GST actually?

GST – everyone knows that it is goods and service tax but finally, the proposed Article 366 (12A) defines it as below

any tax on supply of goods or services or both except taxes on supply of the alcoholic liquor for human consumption .

Service – the proposed definition of service is very broad in its meaning and can be understood from proposed  Article 366 (26A) itself as services means anything other than goods

E.  Dual GST Model

On referring the aforesaid proposed articles and definitions , it can be understood that finally  dual GST system is on the verge of implication in India by April 2016 .

Dual GST is a system whereby both State and Centre will levy tax on goods and services across the  value chain as below :

a. CGST – levied and collected by Centre

b. SGST – levied and collected by State

The Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of goods and services. There will be seamless flow of input tax credit from one State to another. Proceeds of IGST will be apportioned among the States.

Further, it is proposed to levy a non-vatable additional tax of not more than 1% on supply of goods in the course of inter-State trade or commerce. This tax will be for a period not exceeding 2 years, or further such period as recommended by the GST Council. This additional tax on supply of goods shall be assigned to the States from where such supplies originate.

F. Nature of GST

The proposed clause (2) of Article 269A  speaks about the formulation of principles of determining the place of supply, and when a supply of goods, or of services, or of both takes place in course of interstate trade or commerce .

Hence, it is a destination tax and point of consumption is very important for its levy .

It is pertinent to note that the Government of India has assured in various press releases  that a uniform tax will be implemented across the states .

G. Goods & Service Tax (GST) Council

Article 279A is also proposed which will empower Honourable President of India to form a Goods & Service Tax Council i.e GST Council

GST Council can be understood as below :

i) First time in the history of India, a council has been created which will deal with all

what , how , when , where , if  & but

for the purpose of recommendation of procedure , performance,  implication , structuring, law making for levy & collection, rate of tax , cess, surcharge exemption limit, date of levy  etc.  of GST in India .

ii) It will be constituted within 60 days of commencement of the Act . It will board the following persons:

- Finance Minister will be the  Chairperson

- Members will elect Vice Chairperson

- Union Minister of state in charge of revenue as Members

- State Finance Ministers or  Nominated State Ministers will be also Members

iii) another important aspect is decision making and so it has to be taken by the majority in terms of formula for determining the weightage as well.

Overall, the proposed bill and amendment seems to be positive and lets hope that GST finally rolls out in April 2016 .We all are waiting for a better tax regime than the existing one otherwise the spirit of uniform tax era will fail .

I shall be taking much more issues on Goods & Service Tax in my subsequent articles .

Anand Mishra,

Founder Advocate,


The author is a leading indirect tax advocate handling cases in CESTAT & High Courts of India. He can be contacted on and for more please refer

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