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GST Bill ready to be tabled after Cabinet approval



New Delhi, 17 December

After a prolonged wait, the Cabinet on Wednesday approved the Constitutional Amendment Bill on the Goods and Service Tax (GST), paving the way for the legislation to be introduced in the current winter session of Parliament, which will end on December 23.

The Bill is learnt to have sought to include petroleum within GST, but the Centre would be allowed to impose excise duty on it and the states value- added tax ( VAT) for initial years.

Petroleum was one of the contentious issues between the Centre and the states and had delayed the Bill.

States wanted petroleum products excluded from GST as they earn over 50 per cent of their revenues from this head. However, the Centre wanted to keep it within GST so that the chain of providing reimbursement for input taxes is not broken.

The other contentious issue was compensation to states for revenue loss after GST is introduced. Wary after the Centre’s unkept promises on compensation for a cut in the Central Sales Tax ( CST) rate, the states wanted to include GST compensation within the Bill. They also asked the Centre to promise that GST compensation would be provided for five years.

The Bill, it is learnt, contains the compensation for five years, but on a tapering basis.

Petroleum will be included in GST but Centre and states will be allowed to impose their current taxes on it GST compensation to states for five years will be part of the Bill. Centre will provide full compensation for three years and then progressively reduce it Entry tax levied by local bodies to be subsumed within GST.


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