Bihar Passes GST Bill

2019 ias preliminary exam test series

The Bihar Assembly ratified the Constitution Amendment Bill on GST after Chief Minister Nitish Kumar highlighted its benefits.

Bihar is the first non-NDA government to pass GST following its ratification by the BJP-ruled Assam earlier.

The Constitution (122nd Amendment) Bill, 2014 on GST has already been passed by the Lok Sabha and Rajya Sabha.

The GST Bill, seen as the single biggest tax reform in a long time, has to be ratified by at least 15 state legislatures before the President can notify the GST Council, which will decide the new tax rate and other issues.

The Centre has set a deadline of April 2017 for its roll-out.

Goods and Services Tax:

The Goods and Services tax is an indirect tax to be levied when a consumer buys a good or a service. It is intended to replace all indirect taxes that you currently pay. Today, apart from the central excise duty or service tax, there are indirect taxes levied at multiple points on every product or service — be it VAT/sales tax, octroi, luxury tax — which all add up to pinch your pocket.

If the GST Bill becomes law, all the above taxes would now be subsumed under a single GST tax rate. While the final rate is yet to be decided, it is expected to be in the range of 15-18 per cent.

The GST Constitutional Amendment Bill, which incorporates the provisions of the GST, was passed in the Lok Sabha and Rajya Sabha.

GST is expected to help in a seamless flow of goods and services, unifying India into a single national market. This can improve ‘ease of doing’ business.

The current taxation structure has created compartmentalization of markets due to many inter-State taxes which didn’t qualify for credits. GST might simplify the taxation structure and remove distortions in allocation of resources.

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