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Key Amendments Of The Constitutional Amendment Bill 2011


The 115th Constitutional Amendment Bill, 2011 ("Bill") was put before the Parliament by the Finance Minister on 22 March 2011. In its current state, the Constitution of India does not provide concurrent powers of taxation to the Union and the States. The Bill proposes to amend the Constitution to empower the Union and States to frame laws for levying goods and service tax ("GST") on transactions involving the supply of goods and services. The Bill is thus a crucial step by the United Progressive Alliance Government to ensure introduction of the GST regime by 2012 in India.

Taxand India analyses the key amendments to be introduced through the Bill:

  • Power conferred on the Union and States to legislate on matters relating to GST (Article 246A); exclusive power to Union to tax supply of goods or services in inter-state trade and commerce (Article 269A) and other related amendments (Article 270 and Article 286)
  • 'GST' defined - Article 366 (Clause 12A)
  • Taxes subsumed into / excluded from the confines of GST (by way of amendments to List I and List II)
  • Treatment of Goods and Services under the GST regime
  • 'GST Council' to be constituted (Article 279A)
  • 'GST Dispute Settlement Authority' (Article 279B).

Taxand's Take

The 115th Constitutional Amendment Bill marks the beginning of the legislative process required for the implementation of GST in India. It is worth noting that the Bill has been introduced without any consensus of states especially on the issue of division of powers stipulated in the draft Bill. Considering that States are continuing to oppose the Bill, it would be interesting to note how the Union Government moves ahead with the draft Bill and to what extent it would be successful in endeavouring to implement GST in its proposed form in India. The Bill is likely to be vetted by the Parliamentary Standing Committee and taken up for debate in July - Sept 2011.

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Mukesh Butani
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Taxand's Take Author