63 CH. 2 : CONSTITUTIONAL AMENDMENT Para 2.

After the amendment the entry reads as follows:

“54. Taxes on the sale of petroleum crude, high speed diesel, motor spirit
(commonly known as petrol), natural gas, aviation turbine fuel and
alcoholic liquor for human consumption, but not including sale in the
course of inter-state trade or commerce or sale in the course of
international trade or commerce of such goods.”
Thus power to impose tax on sale of various petroleum and petroleum
products is still provided to the State Governments. As mentioned above,
GST Council will recommend the date from which GST is imposed on
these products. After GST is imposed on these products, and no sales
tax will be imposed on these products.

2.4-5 Entry No. 55 - List II

Entry No. 55 in list II prior to amendment reads as follows:
“55. Taxes on advertisements other than advertisements published in the
newspapers and advertisements broadcast by radio or television.”
This entry is deleted as power to levy tax on these activities is available
under article 246A.

2.4-6 Entry No. 62 - List II

Entry No. 62 in list II prior to amendment reads as follows:
“62. Taxes on luxuries, including taxes on entertainments, amusements,
betting and gambling.”
Subsequent to amendment the entry read as follows:
“62. Taxes on entertainments and amusements to the extent levied and
collected by a Panchayat or a Municipality or a Regional Council or a
District Council.”.
Tax on entertainment and amusement is now subsumed in GST. How-
ever, the tax on these activities is also levied by local bodies. They are
still empowered to continue to levy tax on these activities.

2.5 Products not covered under GST

As per definition given in article 366(12A) GST covers all the goods ex-
cept alcoholic liquor for human consumption. It covers petroleum and
petroleum products, tobacco and tobacco products. As per Article
279A(6), the date of imposing GST on specified petroleum products and
petrol crude will be specified by GST Council. Thus initially petroleum
crude and petroleum products will not be covered under GST.
Para 2.9 DIV. 1 : BASIC CONCEPTS 64

However, no GST can be levied on Alcoholic liquor for human con-

sumption. Present system of tax on these products will continue.

2.6 What will be mode of implementation?

As per Article 246A the power to levy GST has been given to the Parlia-
ment as well as to Legislature of every State. Thus Central Govern-
ment has enacted Goods & Service Tax Act, 2016 for levy of Central
Goods and Service Tax (CGST). The Central Government has enacted
Integrated Goods and Service Tax Act to levy Integrated Goods and
Service Tax (IGST) on inter-state transaction. Every State Government
will enact law for levy of State Goods and Service Tax (SGST).

2.7 Will there be dual control of State and Central authorities

for all assessees?
Since the authority to levy GST on supply of goods or services has been
given to both Central Government as well as State Government, there
will be dual control of Centre as well as State on all the assessees.

2.8 How will the Inter-State Transactions of Goods and Ser-

vices be taxed in GST regime?
As for inter-State movement of goods and services, Integrated Goods
and Services Tax (IGST) will be levied by the Centre. The tax will be
apportioned between Centre and the States. The scope of IGST Model
is that Centre would levy IGST which is aggregate of CGST plus SGST
on all inter-State transactions of taxable goods and services. The inter-
State seller will pay IGST on value addition after adjusting available
credit of IGST, CGST and SGST on his purchases. The importing dealer
will claim credit of IGST and use while discharging his output tax liabil-
ity in his own State.

2.9 How will imports be taxed under GST? Will GST replace
basic customs duty also?
The Explanation to Article 269A of Constitution of India provides that
the import of goods or services will be deemed as supply of goods or
services or both in the course of inter-State trade or commerce.
Accordingly import of goods will attract IGST (i.e. CGST plus SGST).
The IGST will be levied along with the Basic Customs Duty which is
65 CH. 2 : CONSTITUTIONAL AMENDMENT Para 2.11

levied as per Customs Act, 1962. In case of import of services only IGST
will be levied.

2.10 What is GST Council?

As provided by Article 279A, the President shall constitute Goods and
Service Tax Council within 60 days from the date of commencement
of the Constitution 122nd Amendment Act, 2014. The GST Council shall
consist of Union Finance Minister as a Chairperson, Union Minister of
State in charge of Finance as a member, the State Finance Minister or
State Revenue Minister or any other Minister nominated by each State
as a member of the Council. The Council shall select one of them as
Vice Chairperson of Council.

2.11 What are powers of GST Council?

As provided under Article 279A, the GST Council will have the follow-
ing powers:
(a) To make recommendations to the Union and the States on the
following:
(i) the taxes, cesses and surcharges levied by the Union, the
States and the local bodies which may be subsumed in the
goods and services tax;
(ii) the goods and services that may be subjected to, or exempted
from the goods and services tax;
(iii) model Goods and Services tax Laws, principles of levy,
apportionment of Integrated Goods and Services Tax and
the principles that govern the place of supply;
(iv) the threshold limit of turnover below which goods and
services may be exempted from goods and services tax;
(v) the rates including floor rates with bands of goods and
services tax;
(vi) any special rate or rates for a specified period, to raise
additional resources during any natural calamity or disaster;
(vii) special provision with respect to the States of Arunachal
Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya,
Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh
and Uttarakhand; and
(viii) any other matter relating to the goods and services tax, as
the Council may decide.