Friday, 24 July 2015

Report of the Select Committee tabled in the Rajya Sabha

We are pleased to release a GST News Alert on the Report of the Select Committee of Rajya Sabha.

The Constitution (122nd Amendment) Bill, 2014 (Bill) was passed by the Lok Sabha on 6 May 2015. As demanded by the Opposition, the Union Finance Minister had referred the Bill for review to the Select Committee of the Rajya Sabha.

The Committee comprising of 21 members was required to submit its report by the end of first week of the monsoon session of the Parliament.

The report was adopted by the Select Committee on 20 July 2015 and tabled in the Rajya Sabha on 22 July 2015. The Note of Dissent prepared by some of the members also form part of the Report.

The key recommendations / observations of the Select Committee include:
i) 1% additional tax on inter-state movement of goods and services to be restricted to the supplies made for a ‘consideration’;
ii) Full compensation to states for a period of 5 years for any loss of revenue;
iii) GST rate for Banking industry should be minimum;
iv) Adequate measures should be taken by the States to protect the flow of revenues to the Local bodies, Panchayats and Municipalities.

With respect to the GST rates, the Select Committee has observed that the standard rate should be within 20%, while the lower rate should not cross 14%.

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