Question

Which Constitutional amendment led to the introduction of the Goods and Services Tax (GST) in India?

• A. 86th Amendment
• B. 61st Amendment
• C. 101 Amendment
• D. 100th Amendment

Answer 1

Answer:

C. 101 Amendment

The Constitution (101st) Amendment Act, 2016 allows both the centre and states to levy the Goods and Services Tax (GST). The Constitution (101st) Amendment Act, 2016 allows both the centre and states to levy the Goods and Services Tax (GST). Before the 2016 amendment, taxation powers were divided between the centre and states. For example, while the centre exclusively taxed services, the states exclusively taxed goods at the time of sale. The 2016 amendment replaces various central and state taxes such as excise duty, service tax, sales tax, entry tax and entertainment tax with GST. While most goods and services will be covered under GST, alcohol for human consumption will remain outside its purview. Petroleum products are initially outside its purview but may be brought under GST if the GST Council so decides. Under the GST framework: (i) the centre will levy and collect the Central GST, (ii) the states will levy and collect the State GST, on supply of goods and services within a state. The centre will levy the Integrated GST (IGST) on inter-state supply of goods and services, and apportion the state’s share of tax to the state where the good or service is consumed. The 2016 Act requires Parliament to compensate states for any revenue loss owing to the implementation of GST. The 2016 Constitutional amendment creates a GST Council consisting of the Union Finance Minister and representatives from all states to implement GST. The Council decide upon subjects including: (i) GST rates, (ii) taxes to be subsumed under GST, (iii) goods and services to be covered under GST, (iv) model laws to be passed by Parliament and state assemblies, (v) apportionment of IGST, and (vi) special provisions for the North-Eastern or Himalayan states.