June 30, 2017

After 17 tumultuous years, a nationwide Goods and Services Tax (GST) will rollout from midnight tonight, overhauling India’s convoluted indirect taxation system, unifying the $2-trillion economy with 1.3 billion people into a single market.

GST, which will replace more than a dozen central and state levies including factory-gate, excise duty, service tax and local sales tax or VAT, is India’s biggest tax reform in 70 years of independence and will help modernise Asia’s third largest economy.

Here is a look at the timelines that shaped the ‘one nation, one tax’ system:

  • February 1986: Finance Minister Vishwanath Pratap Singh proposes a major overhaul of the excise taxation structure in the budget for 1986-87.
  • 2000: Prime Minister Atal Bihari Vajpyee introduces the concept, sets up a committee headed by the then West Bengal Finance Minister Asim Dasgupta to design a GST model.
  • 2003: The Vajpayee government forms a task force under Vijay Kelkar to recommend tax reforms.
  • 2004: Vijay Kelkar, then advisor to the Finance Ministry, recommends GST to replace the existing tax regime.
  • February 28, 2006: GST appears in the Budget speech for the first time; Finance Minister P Chidambaram sets an ambitious April 1, 2010 as deadline for GST implementation. He says the Empowered Committee of finance ministers will prepare a road map for GST.
  • 2008: Empowered Committee of State Finance Ministers constituted.
  • April 30, 2008: The Empowered Committee submits a report titled ‘A Model and Roadmap Goods and Services Tax (GST) in India’ to the government
  • November 10, 2009: Empowered Committee submits a discussion paper in the public domain on GST welcoming debate.
  • 2009: Finance Minister Pranab Mukherjee announces basic structure of GST as designed by Dasgupta committee; retains 2010 deadline.
  • BJP opposes GST basic structure.
  • February 2010: Finance Ministry starts mission-mode computerisation of commercial taxes in states, to lay the foundation for GST rollout.
  • Pranab Mukherjee defers GST to April 1, 2011.
  • March 22, 2011: UPA-II tables 115th Constitution Amendment Bill in the Lok Sabha for bringing GST.
  • March 29, 2011: GST Bill referred to Parliamentary Standing Committee on Finance led by Yashwant Sinha.
  • Asim Dasgupta resigns, replaced by the then Kerala Finance Minister KM Mani.
  • November 2012: Finance Minister P Chidambaram holds meetings with state finance ministers; decides to resolve all issues by December 31, 2012 for GST rollout.
  • February 2013: Declaring UPA government’s resolve to introducing GST, Chidambaram in his Budget speech makes provision for Rs. 9,000 crore to compensate states for losses incurred because of GST.
  • August 2013: Parliamentary standing committee submits report to Parliament suggesting improvements on GST. GST Bill gets ready for introduction in Parliament.
  • October 2013: Gujarat Chief Minister Narendra Modi opposes GST Bill saying state would incur losses worth Rs. 14,000 crore every year due to GST.
  • 2014: GST Bill cleared by Standing Committee lapses as Lok Sabha dissolves; BJP-led NDA government comes to power.
  • December 18, 2014: Cabinet approves 122nd Constitution Amendment Bill to GST.
  • December 19, 2014: Finance Minister Arun Jaitley introduces the Constitution (122nd) Amendment Bill in the Lok Sabha; Congress objects.
  • February 2015: Jaitley sets April 1, 2016 as deadline for GST rollout.
  • May 6, 2015: Lok Sabha passes GST Constitutional Amendment Bill.
  • May 12, 2015: The Amendment Bill presented in the Rajya Sabha.
  • Congress demands the Bill be sent to Select Committee of Rajya Sabha; demands capping GST rate at 18 per cent.
  • May 14, 2015: The GST Bill forwarded to joint committee of Rajya Sabha and Lok Sabha.
  • August 2015: Government fails to win the support of Opposition to pass the bill in the Rajya Sabha where it lacks sufficient numbers.
  • July 2016: Centre opposes capping GST rate at 18%; gets states around.
  • August 2016: Congress, BJP agree to pass the Constitution Amendment Bill.
  • August 3, 2016: Rajya Sabha passes the Constitution Amendment Bill by two-thirds majority.
  • September 2, 2016: 16 states ratify GST Bill; President Pranab Mukherjee gives assent to the Bill.
  • September 12: Union Cabinet clears formation of GST Council
  • September 22—23: Council meets for first time.
  • November 3: GST Council agrees on four slab tax structure of 5, 12, 18 and 28 % along with an additional cess on luxury and sin goods.
  • January 16, 2017: Jaitley announces July 1 as GST rollout deadline. Centre, states agree on contentious issue of dual control and taxing rights on goods at high sea.
  • February 18: GST Council finalises draft compensation bill providing to make good any revenue loss to states in first five years of GST rollout.
  • March 4: GST Council approves CGST and Integrated-GST bills.
  • March 20: Cabinet approved CGST, IGST and UT GST and Compensation bills.
  • March 27: Jaitley tables CGST, IGST, UT GST and Compensation bills in Parliament. Lok Sabha and Rajya Sabha pass all the four key GST Bills — Central GST (CGST), Integrated GST (IGST), State GST (SGST) and Union Territory GST (UTGST).
  • May 18: GST Council fits over 1,200 goods in one of the four tax slabs of 5, 12, 18 and 28 %. Over 80% of goods of mass consumption either exempted or taxed under 5% slab.
  • GST Council fixes cess on luxury and sin goods to create kitty for compensating states.
  • May 19: GST Council decides on 5, 12, 18 and 28% as service tax slabs.
  • Jun 21: All states except Jammu and Kashmir pass SGST law.
  • June 28: Mamata Banerjee announces her party’s decision to skip midnight launch of GST.
  • June 29: Congress, Left too decide to skip launch.
  • June 30 Midnight: GST set to rollout.

[The Hindu Business Line]