A Ray of Hope for GST in India
Unfazed by the opposition, the Indian cabinet yesterday approved the constitutional amendment bill on GST. It is now proposed to be placed before the Parliament in this budgetary session post President's recommendation later this week.
In view of objections raised by many States, the Finance Ministry seems to have worked out a solution by proposing to introduce, in the budgetary session, a hybrid of the second and third draft of the constitutional amendment bill on GST. The major point of difference from the previous draft seems to be setting up the GST Council through an Act of Parliament, instead of a presidential order. Additionally the composition of the GST Dispute Resolution Authority, earlier proposed as a part of the bill, will be decided by the Parliament.
Post introduction in Parliament the bill will be sent to the Standing Committee, which will look into objections and suggestions from various stakeholders. For the approval of the bill, a two-third majority in Parliament is needed, as is the approval of not less than half the States.
There is no doubt progress is being made in line with the government's proposals to roll out GST from April 2012 but many more hurdles need to be jumped before GST can finally be implemented. Multinationals need to be kept informed as plans progress to prepare for the inevitable.
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