GST Day 2020: History and Significance of The Day That Commemorates Introduction of 'One Nation, One Tax' Regime in India

Team Latestly

The Goods and Services Tax or GST was introduced in India on July 1, 2017, by the Bharatiya Janata Party (BJP) led NDA government to bring the entire nation under the single taxation system. Therefore, every year on July 1, GST Day is observed. In simple words, GST is an indirect tax imposed on the supply of goods and services across India. The GST is collected from the point of consumption and not from the point of origin. On this GST Day, let’s go through history and significance of the “one nation, one tax” regime.

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In 2002, the Atal Bihari Vajpayee government formed a task force under Vijay Kelkar to recommend tax reforms in India. Three years later, the Kelkar committee recommended rolling out GST by the 12th Finance Commission. By that time, the Congress-led UPA had come to power at the Centre. The UPA government also continued work on the proposed GST roll-out. However, the GST Bill was introduced in the Lok Sabha in 2014 when Narendra Modi-led BJP wrested power. GST Day: Recalling Then FM Arun Jaitley's Speech Highlighting The Gains of Goods & Services Tax.

In May 2016, the Lok Sabha passed the Constitution Amendment Bill, paving way for the GST. In August, the Amendment Bill was passed by the Rajya Sabha and the then President Pranab Mukherjee gave his assent to it. Subsequently, a 21-member committee was formed to look into the proposed GST laws.

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After approval by the GST council, various bills including the Central Goods and Services Tax Bill 2017 (The CGST Bill), the Integrated Goods and Services Tax Bill 2017 (The IGST Bill), the Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill), the Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill), these Bills were passed by the Lok Sabha on March 29, 2017. A week later, the Upper House also cleared these bills.

The GST system currently has four slabs — 5%, 12%, 18% and 28%. On top of the 28% slab, a cess is levied on automobiles, luxury, demerit and sin goods.