Why does introduction of GST require a Constitutional Amendment?
Question : Why does introduction of GST require a Constitutional Amendment?
Answer : The Constitution provides for delineation of power to tax between the Center and States. While the Center is empowered to tax services and goods upto the production stage, the States have the power to tax sale of goods. The States do not have the powers to levy a tax on supply of services while the Center does not have power to levy tax on the sale of goods. Thus, the Constitution does not vest express power either in the Central or State Government to levy a tax on the ‘supply of goods and services’. Moreover, the Constitution also does not empower the States to impose tax on imports. Therefore, it is essential to have Constitutional Amendments for empowering the Center to levy tax on sale of goods and States for levy of service tax and tax on imports and other consequential issues.
As part of the exercise on Constitutional Amendment, there would be a special attention to the formulation of a mechanism for upholding the need for a harmonious structure for GST along with the concern for the powers of the Center and the States in a federal structure.
- What is the justification of GST?
- What is GST? How does it work?
- How can the burden of tax, in general, fall under GST?
- How will GST benefit industry, trade and agriculture?
- How will GST benefit the exporters?
- How will GST benefit the small entrepreneurs and small traders?
- How will GST benefit the common consumers?
- What are the salient features of the proposed GST model?
- Why is Dual GST required?
- How would a particular transaction of goods and services be taxed simultaneously under Central GST (CGST) and State GST (SGST)?
- Which Central and State taxes are proposed to be subsumed under GST?
- What is the rate structure proposed under GST?
- What is the concept of providing threshold exemption for GST?
- What is the scope of composition and compounding scheme under GST?
- How will imports be taxed under GST?
- Will cross utilization of credits between goods and services be allowed under GST regime?
- How will be Inter-State Transactions of Goods and Services be taxed under GST in terms of IGST method?
- Why does introduction of GST require a Constitutional Amendment?
- How are the legislative steps being taken for CGST and SGST?
- How will the rules for administration of CGST and SGST be framed?