The GST Constitutional (122nd Amendment) Bill’ 2014 became the GST Constitutional (101st Amendment) Act’ 2016 when the president assented the provisions of bill on 8th Sept’ 2016.
GST Constitutional (101st Amendment) Act’ 2016 contains the provisions which are necessary for the implementation of GST Regime. The present amendments would subsume a number of indirect taxes presently being levied by Central and State Governments into GST thereby doing away the cascading of taxes and providing a common national market for Goods and Services. The aim to bring about these amendments in the Constitution is to confer simultaneous power on Parliament and State legislatures to make laws for levying GST simultaneously on every transaction of supply and Goods and Services.
The amendment Act contains 20 amendments. As per Sub Section (2) of Section 1, the constitutional amendments are to be enforced with effect from such date as the Central Government may, by notification in the Official Gazette, appoint. The central government, in exercise of this power has appointed the 16th day of September, 2016 as the date on which the provisions of Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 13, 14, 15, 16, 17, 18, 19 and 20 of the said Constitutional amendment Act, shall come into force. This notification has been issued to carry out the provisions of Constitutional amendments. Prior to this notification, the presidential order dated 15th September 2016, has also confirmed the constitution of GST Council.
Goods and Services Tax Council provisions notified wef 12.09.2016
GST- Govt notifies applicability of 19 Section from 16.09.2016
Thus, all the amendments of Constitution (One Hundred and First Amendment) Act, 2016 is now active. The amendments are tabled below for ready reference of the readers:-
|
Provision |
Issue |
| Section 1 |
This section provides for short title and commencement of the Constitution(Amendment) Act. As per Sub Section (2), these amendments are to be applicable from the date to be notified by the Central Government. |
| Section 2
(Most Important Amendment) |
NEW ARTICLE 246A INSERTED – SPECIAL PROVISION WITH RESPECT TO GOODS AND SERVICES TAX
This section makes enabling provisions for the Union and States with respect to the GST legislation. It further specifies that Parliament has exclusive power to make laws with respect to GST on interstate transactions. Thus, as per these provisions, the CGST and SGST Act shall be made by Central Government and State Governments respectively, while the IGST Act shall be made by Central Government only. |
| Section 3 | AMENDMENT OF ARTICLE 248
This section seeks to make consequential amendments in article 248 of the Constitution in view of the amendment in section 2 of the Bill. |
| Section 4 | AMENDMENT OF ARTICLE 249
This section seeks to make consequential amendments in article 249 of the Constitution in view of the amendment in section 2 of the Act. This amendment enables Parliament to make laws in national interest, if so required as per the procedure laid therein. |
| Section 5 | AMENDMENT OF ARTICLE 250
This section seeks to make consequential amendments in article 250 of the Constitution in view of the proposed amendment in section 2 of the Act. The amendment makes it clear that Union may legislate as in other cases if a proclamation of emergency is in operation. |
| Section 6 | AMENDMENT OF ARTICLE 268
This section seeks to amend article 268 of the Constitution to omit the duties of excise on medicinal and toilet preparations from the purview of the power of the Government of India in view of the proposed imposition of goods and services tax on goods and services. |
| Section 7
|
OMISSION OF ARTICLE 268A
This section seeks to omit article 268A of the Constitution. The said article empowers the Government of India to levy taxes on services. As tax on services has been brought under GST, such a provision would no longer be required. |
| Section 8 | AMENDMENT OF ARTICLE 269
Article 269 provides for the taxes levied and collected by the Union but assigned to the States. The present amendment has been made consequential to the insertion of new article 269A which provides for levy of goods and services tax on supplies in the course of inter-State trade or commerce. |
| Section 9
(Most Important Amendment) |
INSERTION OF NEW ARTICLE 269A – LEVY AND COLLECTION OF GOODS AND SERVICES TAX IN COURSE OF INTER-STATE TRADE OR COMMERCE The present section seeks to insert a new article 269A which provides for goods and services tax on supplies in the course of inter-State trade or commerce which shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council. It also provides that Parliament may, by law, formulate the principles for determining the place of supply, and when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. |
| Section 10 | AMENDMENT OF ARTICLE 270
This amendment provides that goods and services tax levied and collected by the Government of India, shall also be distributed. |
| Section 11
(Most Important Amendment) |
AMENDMENT OF ARTICLE 271
This amendment put restrictions on the powers of Parliament to levy surcharge for on the GST. In other words, it provides that goods and services on which GST is levied shall not be subject to any surcharge under article 271. |
| Section 12
(Most Important Amendment) |
INSERTION OF NEW ARTICLE 279A – GOODS AND SERVICES TAX COUNCIL
The present section has inserted the provisions for GST Council. The Goods and Services Tax Council shall consist of the following members, namely:- a) The Union Finance Minister…………………… Chairperson; b) The Union Minister of State in charge of Revenue or Finance…………….. Member; c) The Minister in charge of Finance or Taxation or any other Minister nominated by each State Government………………..Members. Further the Goods and Services Tax Council shall make recommendations to the Union and the States on- a) The taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the goods and services tax; b) The goods and services that may be subjected to, or exempted from the goods and services tax; c) Model Goods and Services Tax Laws, principles of levy, apportionment of Integrated Goods and Services Tax and the principles that govern the place of supply; d) The threshold limit of turnover below which goods and services may be exempted from goods and services tax; e) The rates including floor rates with bands of goods and services tax; f) Any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster; g) Special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and h) Any other matter relating to the goods and services tax, as the Council may decide. |
| Section 13 | AMENDMENT OF ARTICLE 286
This is a consequential amendment |
| Section 14
(Important Amendment) |
AMENDMENT OF ARTICLE 366
The present section specifies the definition of ‘Goods and Services Tax’, ‘Services’ and ‘State’. As per the definitions, only alcoholic liquor for human consumption has been excluded from the ambit of GST Constitutionally. All other forms of alcohol like alcohol for industrial use and medicinal and toilet preparation containing alcohol which falls in the taxing domain of the Central Government have been included in GST. This exclusion has been done to address the strong concern of the states regarding loss of revenue if potable alcohol was to be subsumed under GST. |
| Section 15 | AMENDMENT OF ARTICLE 368
This clause seeks to amend article 368 of the Constitution in view of the amendments referred to in Section 12 of the said Act(GST Council) so as to apply the special procedure which requires the ratification of the Bill by the Legislatures of not less than one half of the States in addition to the method of voting provided for amendment of the Constitution. Thus, any modification in GST Council shall also require the ratification by the legislatures of one half of the states. |
| Section 16 | AMENDMENT OF SIXTH SCHEDULE
This section seeks to amend the sub-paragraph (3) of paragraph 8 of the Sixth Schedule to the Constitution with a view to empower the District Council for an autonomous district to have the power to levy and collect taxes on entertainment and amusements within such district. |
| Section 17
(Important Amendment) |
AMENDMENT OF SEVENTH SCHEDULE
This section seeks to make the consequential amendments in Union List and State List Entries |
| Section 18 | The present section provides for the Mandatory Compensation to States for 5 years for loss of revenue on account of introduction of goods and services tax.
The present Constitutional amendment Act has deleted the provisions for the applicability of 1% additional tax on inter state transactions. |
| Section 19 |
This section seeks to provide for transitional provisions. This section prescribe a timeframe of 1 year within which the subsuming of different indirect taxes into GST would take place and enable the competent Legislature to amend or repeal their existing laws to pave the way for imposition of SGST in the States |
| Section 20 |
This section provides the power to president to remove difficulties within a period of 3 years. |
(CA Raman Singla, Partner – Indirect Tax Professionals , Devalya Advisory LLP, Mob: +91 9899834353, Mail: caramansingla@gmail.com)
Author Bio
Hello
I’m a law student.. I got a moot problem relating to
Constitutional validity of the 101st constitution Amendment Act, 2016.. can someone pls help me with this?
As per relevant amendments in schedule 7, the central excise duty will be levied on some specific goods listed therein i.e. Entry 84. one item is “(f) tobacco and tobacco products”.
while Excise duty will continue on this, GST must not be levied, whereas as per section 9(1) of CGST Act, supply of all goods except alcoholic liquor is liable for CGST.
Further as per section 9(2) of CGST Act, central tax on the supply of petroleum crude, high speed diesel, motor spirit
(commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect
from such date as may be notified by the Government on the recommendations of the
Council.
when we look into both provisions, it seems that tobacco and its products which is already been levied with excise duty & now GST regime also it will be taxable as section 9 doesn’t exclude it. it’ll lead to double tax on single transaction under both statute.
Further, amendment in entry # 54 of list II, now sale tax levy power is only on specific goods, but tobacco & its product is missing their, which means now state government will not have power to levy tax on sale of tobacco..
I invite comments on it…to have better clarity on tax on tobacco.
Thanks,
Excellent & brief analysis of the core amendments. Thank You CA Raman Singla.