The whole country is wondering and thinking about the newly implemented unified taxation system that is known as GST – Goods and Services Tax. GST has subsumed all other indirect taxes that were used to imposed by Centre and the State Government previously.
Basically, GST is a consumers’ tax. It means the one who is the final consumer of any goods or services, is liable to pay GST. To make GST more simple, Government has categorized goods and services under following 4 slabs rates - 5%, 12%, 16% and 28%.
The implementation of GST was not easy. The journey took 17 long years to get properly implemented. Let's move ahead and take a journey to the past.
11 Phases of GST in India
The journey to the history of GST in India started in the year 2000 during the Government of Atal Bihari Vajpayee. The dream of one nation one tax which was seen 17 years back becomes a reality in 2017 during Modi Government.
Let's proceed and discuss each phase gradually:
Phase 1 - The Year 2000
The very first proposal on embracing GST was given by the Government of Atal Bihari Vajpayee in the year 2000. An Empowered Committee (EC) was formed under the aegis of Asim Dasgupta, the then Finance Minister of West Bengal, to develop the skeleton of GST.
Vajpayee asked all the state and central government representatives to analyse every aspect of the proposed GST and then to prepare the report on various aspects of the same including thresholds, exemption, taxation of inter-state supplies and taxation of services and other related reports. The committee headed by Dasgupta till 2011.
Phase 2 – 2002 – 2004
The draft was formed, finance ministers from state and central government analysed the GST structure. Later in between the years 2002 to 2004 Vajpayee Govt. formed a task force under the leadership of Vijay Kelkar, the then advisor to the finance ministry to recommend the new tax reforms.
Kelkar Task Force pointed some severe issues in existing tax structure. He pointed in his report that by implementing GST, all the issues will be eradicated. The task force advice to unify all indirect taxes in the form of Goods and Services Tax.
Phase 3 – 2005 – February 2006
80% work of GST has been completed by the task force formed by Vajpayee Government. Then came Lok Sabha Election, in which Vajpayee Govt. defeated against Congress-led UPA Govt.
After UPA took over the charge, newly appointed Finance Minister P. Chidambaram continued the work on GST and announced the implementation of GST by 1st April 2010 in the budget speech of February 2006.
Chidambaram said implementation of GST was the long-term goal of Govt. It was aimed to cover overall distribution as well as the production chain of the commodities.
Phase 4 – November 2006 to May 2007
The time was coming nearer to implement new taxation system namely – GST. Every State and Central Government were rigorously working on the same.
In November 2006, Parthasarathy Shome (advisor to Finance Minister), advised the then Finance Minister P. Chidambaram to create Joint Working Group. The group was compact with the finance ministers of all states and were formed to analyse the impact of GST on revenues of all states in India.
In May 2007 these Empowered Committees of State Finance Ministers started working to know the impact of GST on revenue of all states in the country. The committee was also formed to know the tentative effects of GST after its implementation. On 19th December the Joint Working Group had submitted its report to EC.
Phase 5 – 2008 to 2009
In the month of February 2008, the Kelkar Task Force came with a finalized report on GST. The name of the report was - A Model and Roadmap of GST in India.
Later a basic skeleton of GST was introduced by the then newly appointed Finance Minister Pranab Mukherjee in July 2009. And in November 2009 EC put forth First Discussion Paper related to GST and its regime.
Phase 6 – 2010
2010 was the year when GST was about to launch, but the plan was pushed by one more year. This had happened because of the launch of newly introduced Government project - Mission-Mode.
Later the then Finance Minister P. Chidambaram declared new date of implementation of GST that is from 1st April 2011. It was no less than a dramatic turn in the GST history.
Phase 7 – 2011
Congress, the ruling party of that time introduced the 115th Constitution Amendment Bill in Lok Sabha to impose GST on all kinds of goods and services. Few specific goods and services were exempted.
The opposition party protest against the bill over the clause 279B according to which Centre Govt. is given additional power over GST dispute authority. The bill was sent to standing committee for the thorough analyzation.
Seeing much delay in implementation of GST, P. Chidambaram (F.M) set 31st Dec 2012 the deadline to resolve concern issues.
Phase 8 – 2013
Examination of GST bill was completed by the standing committee. In August 2013 it submitted its report to the Parliament.
It has included the proposal of including the petroleum products in GST, but EC rejected the proposal.
Phase 9 – 2014 - 2015
This was the same year when Narendra Modi was elected as the Prime Minister of India.
The newly appointed Finance Minister Arun Jaitley, present 122nd constitutional amendment bill to impose GST.
The opposition raised issue and demand to submit the same to the standing committee.
In May 2015 the amendment bill was passed by Lok Sabha. The hint of the new implementation date of imposing GST was given by Arun Jaitley as on 1st April 2016.
Phase 10 – 2016
The economy of India was about to see the new phase with the implementation of the newly introduced taxation system.
After two long years finally in the year 2016, the 122nd constitutional amendment bill was passed by Rajya Sabha with the approval of Honourable President in September 2016.
Phase 11 – 2017
The newly introduced bill then started considering as an Act from 12th April 2017. Further, the act was also passed by state legislatures. Ultimately the day comes when finally, GST has completed its 17 years of long journey of its implementation. GST was launched all over India with effect from 1st July 2017 except Jammu and Kashmir where it came into the act from 7th July 2017.
Finally, the dream of the unified taxation system which was seen by former Prime Minister Atal Bihari Vajpayee in 2000 turned in to the reality after 17 long years. In July 2018 GST will celebrate its first birthday, it would be interesting to see the result of GST – the unified taxation system, after one year.
Ever since from its implementation people are being indulged in understanding the GST regime. Hence come Taxner in the scene as the best GST solutions in India which will help you in making all your financial activities smooth.