Centre, States can levy taxes for one year after GST notification: Jaitley
October, 01st 2016
Laying to rest doubts on the government’s powers to levy indirect taxes after the notification of the Constitution Amendment Act for the goods and services tax regime, Finance Minister Arun Jaitley said that the new legislation empowers the government to continue levying excise duty, service tax and value added tax (VAT) till September 16, 2017.
“Until one year after the provisions of the Constitution (101st Amendment) Act, 2016 is brought into force, the Constitution empowers the Central Government to levy excise duty on manufacturing; and service tax on the supply of services,” he informed the Parliamentary Consultative Committee attached to the Ministry of Finance on Friday.
He further added that the Constitution Amendment Act similarly also empowers the State governments to levy sales tax or VAT on the sale of goods till that time for the same time period.
` His comments come after there were questions over the legality of levying excise duty and services tax when provisions of the Constitution Amendment Act for GST had been notified on September 16.
At that time, after discussions with the Law Minister, Revenue Secretary Hasmukh Adhia had said there is “no legal infirmity” in the notifications.
Rollout as per schedule
Meanwhile, in his opening remarks at the meeting, the Finance Minister also expressed confidence that GST will be rolled out from April 1, 2017, adding that the government is following the road map for implementation of indirect tax levy as per the schedule.
Jaitley also assured the Committee that the GST Council is working in a cordial environment.
Members of the Committee also made suggestions and sought clarifications on GST.
“The members hoped that this law will bring relief to the common man by exempting certain essential items from GST and moderate the rate of taxation on other items which in turn will bring down the prices consumption items of the common man as well as cost of living at large,” said an official release.