Samarth Jain

Samarth jainTo set the stage for the ambitious reform legislation, The Modi Government introduced the Constitution (122nd) Amendment Bill, 2014 in the Lok Sabha on 19th December, 2014 for amending the Constitution of India. This was necessary for empowering the govt. to facilitate the introduction of Goods and Services Tax (GST) in the country as in the proposed GST model both the Central and State govt. will levy tax on a common base.

The Bill contained 21 clauses and was passed in the Lok Sabha on 6th May, 2015. Then, when the Bill reached Rajya Sabha, on the note of further legislative scrutiny, a Select Committee was formed and the Bill was referred to this Committee. The Select Committee under the chairmanship of Shri Bhupender Yadav submitted its report on 22nd July, 2015 in the Parliament recommending various changes.

The cabinet accepted most of the changes in the GST legislation proposed by the Select Committee on 29th July, 2015. Here is a brief comparison of what Select Committee recommended and what the Union Cabinet approved.

Select Committee Recommendations Approved by Union Cabinet

Define bands to mean the ‘’Range of GST rates over the floor rate within which CGST or SGST may be levied on any specified goods or services or any specified class of goods or services by the Central or a particular State Government as the case may be’’.

The Government has agreed that a “band” tax rate would be finalised for the GST while framing the rules.


Explanation should be given for the word ‘supply’ to mean all forms of supply made for a consideration.

The government accepted the panel’s recommendation partially that the additional 1% tax on supply of goods proposed in the bill be restricted to the inter-state sale of goods and not stock transfers by a company from its one location to another.


Replace the words in the Clause 19 of the Bill from “upto 5 years” to “for 5 years” and pay 100% Compensation for all five years.

The government has agreed to change the language proposed in the bill with regard to compensation to states for revenue losses arising from GST’s implementation. The bill will be amended to say that states will be compensated “for 5 years” rather than up to five years. However, it is unclear if the centre has accepted the states’ demand to provide full compensation for five years rather than the tapering compensation structure proposed in the bill.

Now the 122nd Amendment Bill, along with the changes approved by the Union Cabinet will be placed before Rajya Sabha for its approval. If the bill gets passed in the Rajya Sabha, the government will have to again go back to the Lok Sabha for getting the Lower House approval for the proposed changes approved by the Cabinet.

There are a total of 245 members in the Upper House of Parliament of which 68 belong to Congress, 11 to AIADMK and 10 members to the left parties. This implies that out of 245 members, 89 belong to the parties opposing the bill finally approved by the Cabinet. Together, these parties make up a little more than one third of the seats in the Rajya Sabha (Approximately 7 surplus seats). The point to be noted over here is that a Joint Session of the Parliament cannot be called in the case of a Constitutional Amendment. Therefore it becomes necessary for the Government to get some of them on Board to get the required consent in the Upper House.

From the consumer and business perspective, what is materially different in the Constitution (122nd) Amendment Bill, 2014 from the 115th Constitution Amendment Bill, 2011 is the 1% Additional Tax.

GST was initiated by the UPA Government and surprisingly some of the dissenting points were not part of the 2011 Bill piloted by the Congress. The dissent notes submitted by the different opposing parties are inconsistent. This clearly highlights the difference in their expectations from GST that they cannot even present a common dissent note. All this leaves us to wonder if the dissent notes are just politically motivated or they are doing it for the good of the country. Only they know what that good will be.

It is hard to understand one thing, that if the agenda of the different political parties is only and only the development of the country and the welfare of the people as they claim, then how is it possible that they all have a different model for the development and they find the other’s model to be objectionable in the interest of the country.

If the paramount agenda is the progress and development of the country then Mantriji, this is need of the hour to think and come up with a model that atleast 2/3rd of you from each house of the parliament can accept.

We know it will be a difficult task, as almost a decade has passed since the idea of GST was first introduced in the Parliament and still you cannot come to a consensus. And in the end, we have a hand folded request that don’t put entire country hostage because of your politics.

There is no doubt that the GST model in the present form is a fractured one but it is still a huge improvement over our Present system. It may be a small step up but it is a step in the right direction.

As far as the shortcomings are concerned, the truth is that the compromises often become necessary in Federal democracies where you have to take all the states on the board. An imperfect GST is atleast a beginning, over a period of few years all the flaws can be plugged. It’s on you now whether you find the Glass half-filled or half empty.

(Author may be reached at Contact +919999110059, Email id: [email protected] )

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  1. Samarth Jain says:

    CA. Subhash Chandra Podder ji,

    There is still a bleak ray of hope that it might roll out on 01st April, 2016 as there is a possibility that the Govt. might call a special session next month just to pass the GST Bill in case if it fails to pass in the monsoon session.

  2. CA. Subhash Chandra Podder says:

    GST will not be rolled out during this monsoon session of parlm. Even I feel it may not be rolled out before 01/04/2017 !!

  3. Samarth Jain says:

    Sir, first I am thankful to you that you that you read my article and find me good enough for the discussion.

    I agree with your concern. A lot depends upon RNR. If it comes anything below 20%, then it is definitely workable. But yes, in case it exceeds 20%, then it will be a ready recipe for the economic disaster. It is quite expected that for 1-2 years there will be a lot of chaos and uncertainty, but things will settle down soon. The motive of the Govt. is not here to earn more Revenue after the implementation of GST but it is to ease the current complex Taxation system.

    And Sir as far as the good of only big corporate houses is concerned, I would like to say unless the Business will develop, no employment opportunities can be created for a common man. So if the motive of the Govt. is to attract big corporate houses to bring investments in India by facilitating them then in my view it is a step in the right direction. It will be a win win situation for all of us, be it Government, Businessman, Professionals or the common man.

  4. SIVAKUMAR says:

    Sir while i agree with your views, the moot question is whether the GST will increase or reduce the tax burgen on the common man is entirely dependent on the RNR and the band width. Unfortunately neither the Govt. nor the analysists consider the common man as one of the stake holder in the whole process, but he is the only and ultimate person to be impacted by GST. Corporates, Business people, Traders are not really affected since the will be collecting the tax on output tax and will be availing the input credit for the inputs. But where will the common man go for credit if the floor rate or periodical increase in tax rates? The whole exercise seems to be aimed at foreign invetments, ease of doing business?? for the foreign corporates [not even indian corporates are having level playing field with multinational companies] but not for the benefit of common man. Prices will shoot up definitely immediately on implementation of GST, which is the experience of all countries which implemented GST.

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June 2021