11. Explain the salient features of the Constitution (One Hundred and First Amendment) Act, 2016. Do you think it is efficacious enough 'to remove cascading effect of taxes and provide for common national market for goods and services'? (250 words) 15M
Ans. The 101st Constitutional Amendment Act was passed to replace the existing indirect tax structure in India with a new regime of taxes with the name of GST (Goods and Services Tax).
A. Article 246 (A)
• Under this article, both Union and States in India now have 'concurrent powers' to make law with respect to goods and services.
• The intra-state trade now comes under the jurisdiction of both Centre and state; while inter-state trade and commerce is "exclusively" under Central Government jurisdiction.
B. Article 269 A
• This article says that in case of the
inter-state trade, the tax will be levied and collected by the Government of India and shared between the Union and States as per
recommendation of the GST Council.
• The article also makes it clear that the proceeds such collected will not be credited to the consolidated fund of India or state but respective share shall be assigned to that state or Centre.
C. Article 279-A
This article provides for constitution of a GST council by President within sixty days from this Act coming into force. The GST council will constitute the following members
• Union Finance Minister as Chairman of the council.
• Union Minister of state in charge of revenue or finance.
• One nominated member from each state who is incharge of finance or taxation
• This council will have the responsibility of deciding on the tax rates, this will have voting share as 2/3 to states and 1/3rd to Centre.
This new indirect tax regime will definitely remove the cascading effect of taxes along with providing a common national market for the goods and services in the country.
(i) It is a destination based tax which is levied on the value added to the product. So it will eliminate the multiple tax structure. It will be same in every state of the nation which is different from VAT which used to be different in different states.
Ans. The 101st Constitutional Amendment Act was passed to replace the existing indirect tax structure in India with a new regime of taxes with the name of GST (Goods and Services Tax).
- 1. Under this Act few new articles have been incorporated in the Constitution such as
A. Article 246 (A)
• Under this article, both Union and States in India now have 'concurrent powers' to make law with respect to goods and services.
• The intra-state trade now comes under the jurisdiction of both Centre and state; while inter-state trade and commerce is "exclusively" under Central Government jurisdiction.
B. Article 269 A
• This article says that in case of the
inter-state trade, the tax will be levied and collected by the Government of India and shared between the Union and States as per
recommendation of the GST Council.
• The article also makes it clear that the proceeds such collected will not be credited to the consolidated fund of India or state but respective share shall be assigned to that state or Centre.
C. Article 279-A
This article provides for constitution of a GST council by President within sixty days from this Act coming into force. The GST council will constitute the following members
• Union Finance Minister as Chairman of the council.
• Union Minister of state in charge of revenue or finance.
• One nominated member from each state who is incharge of finance or taxation
• This council will have the responsibility of deciding on the tax rates, this will have voting share as 2/3 to states and 1/3rd to Centre.
- 2. Changes in the 7th schedule have also been made to modify the lists in which both Centre and State Governments have the power of taxation.
This new indirect tax regime will definitely remove the cascading effect of taxes along with providing a common national market for the goods and services in the country.
(i) It is a destination based tax which is levied on the value added to the product. So it will eliminate the multiple tax structure. It will be same in every state of the nation which is different from VAT which used to be different in different states.
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