The proposed goods and services tax (GST) regime will include a GST commission to address any instances of non-compliance by the stakeholders ? states and the Centre? with adequate constitutional powers to spell out penalty for the defaulter.
?The draft constitutional amendments prepared by the finance ministry for the GST regime have proposed a commission, apart from the Centre-State GST Council mooted earlier, to address instances of non-compliance,? a finance ministry official told FE. The commission would be given constitutional powers to levy penalty on defaulters. This is essential for keeping a check on violations and is a mechanism to address them, the official added.
Such a body is a necessity when GST comes as this tax would replace various indirect levies by the Centre and states with a common tax rate. As a result, any defiance or non-compliance by a state would disrupt the GST regime, including the tax credit system.
Apart from the GST commission, the draft sent to the law ministry also talks about a GST council. The council will be chaired by the finance minister with members as minister of state (revenue) and the finance ministers of the states.
There will be also an exclusive list of goods and services which will be the tax base for levying GST. There will also be a provision for amending the law to enable states and the Centre both to levy tax on the tax base mentioned in the list. Some items though, would be out of the GST ambit like alcohol, natural gas and petrol.
The draft amendments, which were finalised by the finance ministry and the law ministry officials are being vetted by the law ministry. There are indications that the bill for constitutional amendments is likely to be introduced in Parliament during the upcoming monsoon session starting July 26.