Article on " Today's hot matter discussed - Goods & Services Tax (GST)
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In the long run-up to introducing GST, the Government was so focused on State governments and negotiating their claims for compensation that it appeared to have missed the fact that India has seven Union Territories that also need to come on board.
Out of the seven, only Delhi and Puducherry have their own legislatures, which would mean that the other five would become tax havens under GST. Being a destination-based tax, supplies to and from Union Territories without Legislature (Daman and Diu, for example) would escape GST. This is certainly not what the Government would have wanted and appears to be a case of drafting dilemmas.
A list of taxes
The GST Council recently came up with a bizarre solution. Just like the State GST (SGST), the thought process at present seems to be to draft a separate law for Union Territories, called UTGST. This would leave us with CGST, SGST, IGST and UTGST, which completely vitiates the tagline of ‘one nation, one tax’. If there are going to be so many GSTs, we might was well replace customs duty with foreign GST (FGST)!
The reason for the GST Council taking this route is clear: another amendment to the Constitution is just not thinkable now. Given the situation post-demonetisation, the Opposition will shoot down any such move. Yet, an amendment to the Constitution seems inevitable if we are to avoid UTGST — either the definition of State can be amended in Article 366 or it can be inserted in Article 246(4), which gives the Government the Power to make laws with respect to any matter for any part of the territory of India which is not included in the State, including the matters enumerated in State List.
Out of the seven, only Delhi and Puducherry have their own legislatures, which would mean that the other five would become tax havens under GST. Being a destination-based tax, supplies to and from Union Territories without Legislature (Daman and Diu, for example) would escape GST. This is certainly not what the Government would have wanted and appears to be a case of drafting dilemmas.
A list of taxes
The GST Council recently came up with a bizarre solution. Just like the State GST (SGST), the thought process at present seems to be to draft a separate law for Union Territories, called UTGST. This would leave us with CGST, SGST, IGST and UTGST, which completely vitiates the tagline of ‘one nation, one tax’. If there are going to be so many GSTs, we might was well replace customs duty with foreign GST (FGST)!
The reason for the GST Council taking this route is clear: another amendment to the Constitution is just not thinkable now. Given the situation post-demonetisation, the Opposition will shoot down any such move. Yet, an amendment to the Constitution seems inevitable if we are to avoid UTGST — either the definition of State can be amended in Article 366 or it can be inserted in Article 246(4), which gives the Government the Power to make laws with respect to any matter for any part of the territory of India which is not included in the State, including the matters enumerated in State List.
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GST also known as the Goods and Services Tax is defined as the giant indirect tax ... Visit for more related articles at Business and Economics Journal ... The sharing of revenues between the states and the centre is still a matter of contention ...
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