Sixteen years ago, during the tenure of Prime Minister Shri Atal Bihari Vajpayee, the idea of implementing a Goods and Services Tax (GST) in India was first proposed. In the Budget for 2006-07, presented on 28th February 2006, the Union Finance Minister announced that GST would be introduced from 1st April 2010. The Empowered Committee of State Finance Ministers (EC), responsible for designing the State VAT, was entrusted with developing a roadmap and structure for the GST. Joint Working Groups comprising representatives from the states and the central government were established to examine various aspects of the GST and prepare reports on exemptions, thresholds, taxation of services, and inter-state supplies. Based on extensive discussions and consultations, the EC released its First Discussion Paper (FDP) on GST in November 2009, which laid the foundation for the current GST laws and regulations.
In March 2011, the Constitution (115th Amendment) Bill, 2011 was introduced in the Lok Sabha to enable the levy of GST. However, due to a lack of political consensus, the Bill lapsed after the dissolution of the 15th Lok Sabha in August 2013.
On 19th December 2014, the Constitution (122nd Amendment) Bill 2014was introduced in the Lok Sabha and was passed by the Lok Sabha in May 2015. The Bill was then referred to the Joint Committee of the Rajya Sabha and the Lok Sabha on 14th May 2015. The Select Committee submitted its report on 22nd July 2015. Subsequently, on 1st August 2016, the Constitutional Amendment Bill was introduced, based on political consensus. The Bill was passed by the Rajya Sabha on 3rd August 2016 and by the Lok Sabha on 8th August 2016. After obtaining ratification from the required number of State legislatures and receiving the President’s assent, the Constitutional amendment was enacted as the Constitution (101st Amendment) Act 2016 on 8th September 2016. This amendment paved the way for the introduction of Goods and Services Tax in India.
After the approval of the GST Council, the Central Goods and Services Tax Bill 2017 (CGST Bill), the Integrated Goods and Services Tax Bill 2017 (IGST Bill), the Union Territory Goods and Services Tax Bill 2017 (UTGST Bill), and the Goods and Services Tax (Compensation to the States) Bill 2017(Compensation Bill) were passed by the Lok Sabha on 29th March 2017. The Rajya Sabha passed these Bills on 6th April 2017, and they were enacted as Acts on 12th April 2017. Subsequently, different State Legislatures passed their respective State Goods and Services Tax Bills. On 1st July 2017, the GST was officially launched by Hon’ble Prime Minister Sh. Narendra Modi, in the presence of the then President of India, Sh. Pranab Mukherjee, during a midnight ceremony at the Central Hall of the Parliament of India.