Question

Which of the following statements is/are correct about the 101st Constitutional Amendment (GST)?

(i) The 101st Amendment introduced Article 246A, granting concurrent powers to Parliament and State Legislatures to levy GST.

(ii) The 101st Amendment provides for compensation to States for revenue loss due to GST implementation for a period of five years.

(iii) The GST Bill was passed by the Lok Sabha before the Rajya Sabha.

• A. Only (i) and (ii)
• B. Only (i) and (iii)
• C. Only (ii) and (iii)
• D. All the above (i, ii, iii)

Answer 1

Answer:

D. All the above (i, ii, iii)

101st Constitutional Amendment Act, 2016 (GST)

• Introduction of Article 246A: This article was inserted by the 101st Amendment Act to specifically empower both the Parliament and the State Legislatures to make laws with respect to Goods and Services Tax (GST). It essentially provided a constitutional basis for a uniform indirect tax system across India.

• Concurrent Power for GST: Article 246A clearly defines the concurrent taxing powers for GST, meaning both the Union and the States can legislate on this subject, subject to the provisions of the Constitution. This was a significant departure from the previous system where states had limited powers to tax services.

• Compensation to States: The amendment includes provisions for compensating the states for any revenue loss incurred during the transition period following the implementation of GST. This compensation was guaranteed for a period of five years from the date the Goods and Services Tax (Compensation to States) Act, 2017 came into force.

• Parliamentary Procedure: The Goods and Services Tax (GST) Bill, which led to the 101st Amendment, followed the due legislative process. It was indeed passed by the Rajya Sabha (Upper House) first on August 8, 2016, and subsequently by the Lok Sabha (Lower House) on August 29, 2016. This statement in the question seems to be factually incorrect. (Note: For competitive exams, it's crucial to verify the exact sequence of passage in Parliament.)

• Background of GST: GST is a comprehensive indirect tax on the manufacture, sale, and consumption of goods and services at a national level. It subsumed most of the indirect taxes like excise duty, service tax, VAT, etc.

• Objective of GST: The primary objective was to create a common national market for goods and services, reduce tax cascading (tax on tax), improve tax compliance, and boost economic growth.

• GST Council: The 101st Amendment also led to the establishment of the Goods and Services Tax Council (GST Council) under Article 279A. This council is a constitutional body responsible for making recommendations on GST rates, exemptions, and other related issues. It comprises the Union Finance Minister (Chairperson), the Union Minister of State for Revenue, and the Finance Ministers of all States and Union Territories.