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Part 2 – Frequently Asked Questions (FAQs) on Goods and Services Tax (GST)

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Recently, the long pending Goods and Services Tax (GST) was passed with thumping majority in both Rajya Sabha and Lok Sabha. In Lok Sabha, the bill got a great response with all political parties supporting the bill with AIADMK (All India Anna Dravida Munnetra Kazhagam) walked out during the voting process. In the previous FAQ part, you learned about the definition of GST the benefits of the new tax structure. In this piece, we will explore few more answers to common questions regarding GST.

Which taxes at the Centre and State level are being subsumed into GST?

The Central Excise Duty, Additional Excise Duty, Service Tax, Countervailing Duty, Special Additional Duty of Customs are merged into one at the central government level. As far as state government is concerned, the State Value Added Tax/Sales Tax, Entertainment Tax, Octroi, Entry Tax, Purchase Tax, Luxury tax and taxes on lottery, betting and gambling are combined into one single tax. For online purchases, IGST will be created.

What are the major chronological events that have led to the introduction of GST?

GST is being introduced in the country after a 13-year long journey since it was first discussed in the report of the Kelkar Task Force on indirect taxes. It was a tough challenge for the government to pass the GST bill. It was P. Chidambaram who proposed the idea of levying GST. However, the opposition parties at that time were opposed to it. Moreover, in coalition politics, things are not smooth. The GST got huge attention in 2014 after the NDA government assumed office.

  • Kelkar Task Force – 2013
  • Budget Speech for the financial year 2006 – 2007 (implementation by April 1, 2010)
  • Design and Road Map for the implementation of GST was assigned to the Empowered Committee (EC)of State Finance Ministers
  • First Discussion Paper on Goods and Services Tax in India released in November 2009
  • Joint Working Group was constituted in September 2009
  • Constitution (115th Amendment) Bill was introduced in the Lok Sabha in March 2011, referred to standing committee on Finance
  • Committee on GST Design formed
  • Report submitted by GST Design in January 2013
  • Three committees formed in Bhubaneswar meeting
  • Parliamentary Standing Committee submitted its Report in August 2013 to the Lok Sabha
  • Final draft Constitutional Amendment Bill sent to the Empowered Committee for consideration in September 2013.
  • More recommendations in Shillong in November 2013
  • 115th Constitutional (Amendment) Bill 2011 lapsed following the dissolution of the 15th Lok Sabha
  • Draft Constitution Amendment Bill was sent to the Empowered Committee in June 2014
  • Introduced in the Lok Sabha on December 19, 2014
  • Passed by the Lok Sabha on May 6, 2015
  • Kerala Finance Minister KM. Mani resigned as GST Council chairman on November 2015
  • Referred to the Select Committee of Rajya Sabha, which submitted its report on 22.07.2015

In the next article, we will cover more answers to your common questions regarding the Goods and Services (GST) tax.

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