New GST Law in India

Under the new GST plan, all indirect levies, barring customs and octroi, will be substituted by GST. But of late GST implementation w.e.f. 1.4.2011 is facing the problem from some of the states including Congress rules states. This is due to central govt plan to have veto powers in respect of GST. The deadlock over veto powers to the Centre had threatened to derail implementation of GST from April 2011. The states think that their powers will be indirectly curtailed by veto power and if they want to raise any further revenues from GST, there will be problem if centre's veto power is there. So there may be constitutional problem which may threaten national unity.
In the alternative, the government is also thinking to establish Disputes Settlement Authority with Constitutional backing. States had opposed the idea and proposed setting it up under the GST legislation and not under constitutional base . States fear that they will be under strict binding on laws which are finally settled through Disputes setllement authority which has got consitutional back support.

But seeing the opposition, the Bill is being redrafted to say no proposal will be cleared by the GST council unless there is a consensus among all the 30 states and Union Territories, as well as the Centre.The revised draft will be discussed with state finance ministers next week, is similar to the Empowered Committee (EC) of State Finance Ministers on Value Added Tax (VAT), which takes all decisions collectively after building a consensus with checks on states deviating on rules. But full consensus may create problem for centre and it cannot do any amendments as india consist of states of different political parties and they have one or other reasons to see that centre is in trouble. The appears to be redrafted to say no proposal will be cleared by the GST council unless there is a consensus among all the states and Union Territories including the Centre.So centre should revise the draft for two third majority for consensus for any amendments and also there should be some committee for redressel of disputes supported by consitutional support. Let's pray for smooth passage of the draft in EC and also in parliament which will remove draconian multiple laws and multiple returns and we can try to move paperless or less paper oriented nation . The legislation to be passed before Aug27 this year so that GST implementation can place as planned w.e.f.1.4.2011.