The Union Cabinet has approved the changes to the Goods & Services Tax Constitution Amendment Bill, including compensating the States for five years for loss of revenue. With this, the government is all set to bring a revised Constitution Amendment Bill before the Rajya Sabha.
The GST, to be rolled out from April, 2016, will replace all existing indirect taxes, including excise and sales tax, on all products, except alcohol. It has already been okayed by the Lok Sabha but has been pending in the Upper House.
Besides compensating the States for five years, a levy of 1 per cent additional tax by States should be on “all forms of supply made for a consideration”.