Direct & Indirect Taxes, Tax Ready Reckoner, Tax Management, Tax Act. & Rules, Tax Planning & Tax Savings.

Direct & Indirect Taxes, Tax Ready Reckoner, Tax Management, Tax Act. & Rules, Tax Planning & Tax Savings.

Pre-GST Regime and GST Regime in respect of Indirect Taxes

Pre-GST Regime and GST Regime in respect of  Indirect Taxes
Pre-GST Regime and GST Regime in respect of Indirect Taxes
Article 246 of Constitution of India Article 246A inserted by Constitution  (101st Amendment) Act, 2016 
Article 246 gave power through Schedule VII to  Parliament and Legislature of every State to make  laws with respect to indirect taxes to be imposed by  the union or by such State. In view of the above  power, the Union Government levied some of the  following indirect taxes:

1. Central Excise Duty on manufacture of goods

2. Service tax on provision of services

3. Customs duty including Additional customs duty  (countervailing duty) and special additional duty  of customs  Similarly, respective State Governments levied some  of the following indirect taxes:

1. State VAT

2. Luxury tax

3. Octroi and Entry tax

4. Purchase tax

5. Taxes on advertisements

 

(1) Clause (1) of Article 246A has given the power to  Parliament and, the Legislature of every State, to  make laws with respect to goods and services tax  imposed by the Union or by such State.

(2) Clause (2) of Article 246A, provides that  Parliament shall have exclusive power to make laws  with respect to goods and services tax where the  supply of goods, or of services, or both takes place  in the course of inter-State trade or commerce.

(3) As per Article 269A, goods and services tax on  supplies in the course of inter-State trade or  commerce shall be levied and collected by the  Government of India and such tax shall be  apportioned between the Union and the States in the  manner as may be provided by Parliament by law on  the recommendations of the Goods and Services Tax  Council.

This tax shall be called as Integrated Goods and  Service Tax (IGST)

In addition, Article 269A has given power to Central  Government to levy IGST on the import transactions  which were earlier subject to Countervailing duty and  special additional duty of customs under the Customs  Tariff Act, 1975.

(4) As per Article 279A(5), in respect to the following  goods, the Goods and Services Tax Council shall  recommend the date on which the goods and services  tax be levied—

(i) petroleum crude,

(ii) high speed diesel,

(iii) motor  spirit (commonly known as petrol),

(iv) natural  gas and

(v) aviation turbine fuel (ATF).

In view of the above powers, the Central and the State  Governments have introduced Goods and Service Tax  in India by subsuming (absorbing) many indirect taxes  which were hitherto levied by the Central and State  Governments under the pre-GST regime.

See also  First Appeal Filed by the Assessee
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