Four GST Bills Passed
There was progress on the Goods and Service Tax (GST) front, which was one of the major developments in India in March. The Lok Sabha passed four bills related to the GST, leading to key changes in the tax structure in India and streamlining the various layers of central and state indirect taxes by merging them all under the GST framework. The goal of these indirect tax reforms is to make tax administration simpler, increase the rate of tax filing among the populace and improve the ease of doing business.
The four bills that were passed in the Lok Sabha were the Central Goods and Service Tax (CGST) Bill, the Integrated Goods and Service Tax (IGST) Bill, the Union Territory Goods and Service Tax (UTGST) Bill and the Goods and Service Tax (Compensation to States) Bill. The Prime Minister’s Office outlines the functions of these bills as -
“The CGST Bill makes provisions for levy and collection of tax on intra-state supply of goods or services for both by the Central Government. On the other hand, IGST Bill makes provisions for levy and collection of tax on inter-state supply of goods or services or both by the Central Government.
The UTGST Bill makes provisions for levy on collection of tax on intra-UT supply of goods and services in the Union Territories without legislature. Union Territory GST is akin to States Goods and Services Tax (SGST) which shall be levied and collected by the States/Union Territories on intra-state supply of goods or services or both.
The Compensation Bill provides for compensation to the states for loss of revenue arising on account of implementation of the goods and services tax for a period of five years as per section 18 of the Constitution (One Hundred and First Amendment) Act, 2016.”
The CGST, IGST and SGST Bills make up the crux of the GST tax reform, with all the various taxes currently in India being folded under the overarching GST framework. In simpler words, the CGST includes tax revenue that is destined for the central government, the SGST includes tax revenue that is destined for the state governments and IGST includes tax revenue that is accrued when purchasing goods across state lines (ordering goods from another state online for instance). Furthermore, the bills pave the way for compliance checks to be mostly carried out online.
The Finance Bill 2017
2017’s version of the Finance Bill, a regular bill that gets passed at the conclusion of every budget session, made its way through the Lok Sabha in March. The Bill includes changes to the income taxes across various brackets and various other amendments, including making Aadhaar mandatory for filing income taxes and holding a PAN card, introducing anonymous electoral bonds for political funding, changes to tribunals and tax raids. These amendments were controversial also because previous Finance Bills have strictly been limited to matters that make-up a Money Bill, which these amendments do not comport with.
Specifically on tax and other fiscal matters, the Bill slashes the income tax rate of people earning between Rs 2.5 - 5 lakhs, from 10% to 5%. On the other hand, people earning between Rs. 50 lakhs and Rs. 1 crore will see an additional surcharge of 10% being levied upon them.
There are other changes included in the Finance Bill, that are crafted with the aim of improving the ease of doing business in India and boosting India’s economy. These include extending the period in which start-ups can claim deductions, further clarifying the tax code for foreign investors by eliminating wording that led to confusion over multiple taxation, increasing the turnover amount from Rs. 1 crore to Rs. 2 crore, before businesses would require auditing, reducing the tax rate on carbon credit transfers from 30% to 10% and merging the Authority for Advance Ruling (AAR) on income-tax, central excise, customs duty and service tax.
Mental Health Care Bill of 2013
The Mental Health Care Bill of 2013 saw passage in the Lok Sabha, repealing the earlier bill on mental health from 1987. The bill decriminalizes suicide, gives a mental health patient the right of an advance directive, allowing them to both nominate an individual on their behalf as well as determine the procedures they would prefer. These advance directives will be overseen by new bodies known as the Mental Health Review Commission and Board, which can be created at both the federal and state levels. mental health providers will be required to register with these Central and State authorities. The bill also outlines the procedures for admission, treatment and discharge of mental health patients and limits the usage of electroconvulsive therapy.
Maternity Benefits Amended
The Maternity Benefits (Amendment) Bill of 2016 saw passage the Parliament, thus amending the Maternity Benefits Act of 1961. Maternity leave will now last for 26 weeks after the birth of a mother’s first two children and 12 weeks from the third child onwards. The Bill also now makes it mandatory for any workplace with higher than 50 employees to provide creche facilities. Additionally, mothers will be allowed four creche visits during a day.