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Here is how the GST bill was formulated and implemented.

It is quite a riveting debate when it comes to arguing whether the GST was implemented hastily or not, however, it is interesting to note that the GST bill took quite a long time to actually be part of the legislation. From formulating the policy to creating several reforms to bring the policy to life, from deciding rates to passing a complicated and dynamic CGST Act, the GST bill has been through a long and rough path.

The bill hit several snags and was put off by several governments, however, after a lot of consideration and amendments, the bill finally caused a tax revolution in India on the first of July, 2017. Here is how the GST bill was formulated and implemented.

The bill hit several snags and was put off by several governments, however, after a lot of consideration and amendments, the bill finally caused a tax revolution in India on the first of July, 2017.

The Timeline

  1. 1974- The L.K. Jha committee report suggests the adoption of the VAT system. The VAT regime was implemented on the first of April, 2005.

  2. 1986- Vishwanath Pratap, the then Finance Minister, propounds a major amendment to excise tax structure of the country, through the budget of 1986-87. MODVAT (Modified Value Added Tax) is implemented.

  1. 1991- VAT and GST are recommended by the Chelliah Committee.

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  1. July, 1994- Indian taxation system welcomes the Service Tax.

  2. 2000- Presiding Prime Minister, Atal Bihari Vajpayee pushes the concept of GST and forms a committee headed by then West Bengal Finance Minister Asim Dasgupta to look into the matter.

  3. 2003- Vijay Kelkar heads a task force to understand the reformations needed in the tax system, under the Vajpayee government. Haryana becomes the first state to implement VAT.

  1. 2004- CENVAT comes into existence for central level taxation. Kelkar recommends the GST reform.

The L.K. Jha committee report suggests the adoption of the VAT system. Pixabay

  1. 2006- Finance Minister P. Chidambaram mentions GST in the budget speech, sets a deadline of April 1, 2010 for its implementation.

  2. 2008- Empowered Committee consisting of State Finance Ministers joins hands with the Central Government to test out several models of GST and assess which one would be best for India.

  3. April, 2008- A report titled ‘A Model and Roadmap to Goods and Services Tax (GST) in India’ is handed over to the government by the EC.

  1. 2009- The GST paper is made public, open for opposing opinions. Finance Minister Pranab Mukherjee declares the basic skeletal of the GST for the Indian tax system. The structure is opposed by the BJP.

  1. 2010- Commercial taxes were starting to get computerised, setting a base for GST implementation. Pranab Mukherjee pushes the date of implemented to April 2011.

  1. 2011- 115th Constitution Amendment Bill introduced in the Parliament by the UPA government to introduce GST.

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  1. 2012- P. Chidambaram heads a meeting of state finance ministers, plans on creating a suitable bill by thirty-first December, 2012.

  1. 2013- A report is submitted by the Parliamentary Standing Committee, asking to improve the GST Bill. Then Chief Minister of Gujarat Narendra Modi rejects the bill claiming that it would put Gujarat at a loss.

  1. 2014- Due to a change in government, GST Bill dissolves as BJP takes over the Parliament.

  1. December, 2014- The 122nd Constitution Amendment Bill is floored in the Lok Sabha by the then Finance Minister Arun Jaitley. Opposition remains skeptical of the Bill.

  1. February, 2015- April 1, 2016 is proposed as a deadline for the implementation of the GST regime.

  1. May, 2015- GST Constitutional Bill is passed in the Lok Sabha and presented in the Rajya Sabha. Congress proposes a cap of 18% on the GST rate.

  1. August, 2015- The Bill fails in Rajya Sabha as the opposition remained strong in the house and out-votes against the implementation of the Bill.

  1. August, 2016- Congress agrees to back BJP to pass the Constitutional Amendment Bill. The Bill passed in the Rajya Sabha with two-thirds majority.

  1. September, 2016- The Bill is accepted by sixteen states. President Pranab Mukherjee accepts the Bill. The GST Council is agreed upon by the Union Cabinet.

  1. January, 2017- Deadline for the implementation is set for first July, 2017 by Arun Jaitley.

  1. February, 2017- A rough compensation bill is formulated by the GST Council.

  1. March, 2017- CGST, IGST, UTGST and Compensations bills are approved by the Cabinet. All of them are introduced in the Parliament, both houses pass all the crucial GST Bills.

  1. May, 2017- The four categories of taxes proposed by the Council have been crammed with over 1,200 goods, each category having a tax rate of its own. A cess is created to compensate states for luxury goods.

  1. June, 2017- Except for Jammu and Kashmir, every state passes the State GST Bill. Mamta Banerjee, Congress, and the Leftist parties refuse to roll out the bill at midnight.

  1. July, 2017- The GST Bill is implemented countrywide.

Concluding Remarks

It is quite fascinating to see and understand how a financial bill, or any bill for that matter, is passed in the Parliament and implemented in the country. It is definitely no wonder that the GST Bill was one of the biggest tax reforms in India.


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