President Pranab Mukherjee on Thursday gave assent to Constitution Amendment Bill on Goods and Services Tax (GST), a major step towards rolling out the new indirect tax regime which the Modi government wants to come into effect from April 1 next year.
Mukherjee has given approval to the bill, official sources said on Thursday.
The passage of the bill will pave the way for setting up of a GST council that will decide the tax rate, cess and surcharges.
The GST is a single indirect tax which will subsume most of the central and state taxes such as Value Added Tax (VAT), excise duty, service tax, central sales tax, additional customs duty and special additional duty of customs.
The Parliament had on August 8 passed the bill which was then circulated to state governments seeking its ratification.
A Constitution amendment bill needs to be ratified by the legislative Assemblies of at least 50 per cent of the states.
The bill was sent to the President’s secretariat after as many as 17 states, BJP-ruled Assam being the first, ratified the bill.
The other states which have passed the legislation include Bihar, Jharkhand, Chhattisgarh, Himachal Pradesh, Gujarat, Madhya Pradesh, Delhi, Nagaland, Maharashtra, Haryana, Sikkim, Mizoram, Telangana, Goa, Odisha and Rajasthan.
Revenue Secretary Hasmukh Adhia had recently said that the government is ahead of schedule for implementation of GST.
"Instead of 30 days kept for this (states’ ratification), it is achieved in 23 days," he had said in a tweet.
Now that the bill has got Presidential assent, the government will notify the GST Council, which will decide on the tax rate. Headed by Union Finance Minister Arun Jaitley, the Council will comprise state Finance Ministers.
The states and the Centre are working overtime and talking to stakeholders to draft the Central GST, State GST and Integrated GST laws, which are to be passed in the Winter Session of Parliament.
The CGST and IGST will be drafted on the basis of the model GST law. The states will draft their respective State GST (SGST) laws with minor variation incorporating state-based exemptions. The IGST law would deal with inter-state movement of goods and services.