4th draft GST amendment Bill prepared

Under pressure from states, the Centre has prepared a fourth draft of Constitutional Amendment Bill for introduction of the Goods and Services Tax (GST). In the proposed Bill, the finance ministry has dropped some key proposals in the third draft and switched back to the second.

The third draft had proposed setting up a GST Council by the Act of Parliament, instead of President’s order, proposed in the second draft. The Bill, to be tabled in Parliament by the end of the Budget session, will propose setting up a GST Council by Presidential order. It will describe the composition and the role of the Council, to be headed by the Union finance minister.

The Bill is being sent to 30 ministries and government departments for their comments. The finance ministry has also written to the prime minister, seeking his consent to take the Bill to the Cabinet for approval to introduce in the ongoing session of Parliament.

“The Bill is a combination of the second and third drafts. The proposals under Article 279A and 279B in the second draft have been restored as most states felt the second draft was better. The proposals under the third draft about powers to Union Territories have been retained,” said a finance ministry official.

After missing several deadlines, the government is now hopeful of introducing GST in the middle of 2012. Revenue Secretary Sunil Mitra has said the amendments to the Constitution required for rolling out GST may not happen in the current financial year, but the government has the flexibility to introduce it any time during a financial year, unlike direct tax legislation.

Officials said the Bill might come for Cabinet approval within two weeks, as the government had planned to adjourn the Budget session on March 25 to accommodate more time for the coming Assembly poll campaigns.