Bihar became the first Non-NDA State Government to approve the GST bill when the state Assembly passed the bill on 16 August 2016. The process of the bill to be debated and adopted by the state assemblies have been set into motion and expected to be complete before the April deadline when the bill will become law after it is approved by the President.
Assam became the first state to ratify the draft law in the country last week. Bihar CM, Mr. Nitish Kumar had called on the Finance Minister Arun Jaitley and assured that the bill would be passed on August 16, 2016.
Last week in an epic session, the Parliament passed the 122nd Constitution Amendment Bill 2014. The government plans to bring a new tax formula which will supersede all previous state and central taxes of all hues and color into a single tax structure all over the country from April 1, 2017.
The GST bill does not include a significant portion of the oil and gas industry within its ambit, and this increases the fear that it will not reap the benefits of the one-tax-one-nation regime. The oil and the gas sector will not accrue many advantages from the forthcoming tax restructuring and will be losing much if it follows the dual taxation schemes and noncreditable tax costs according to a report.
The upcoming revamp of the tax structure will be beneficial for most sections of the economy baring a few, and this includes the petroleum sector. The profitability will be hit by extra burden caused by dual tax regime and tax related under-recoveries. The new tax system also excludes the tobacco and liquor industry which of course is not much of a worry.
The bill will become effective only after it is passed by at least 19 state assemblies. The government will also set up a GST Council which will give recommendations on the taxes which will be included, sectors which will be given exemptions, date from which the new regime will become active, etc.