An Introduction to Goods & Service TAX

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What is GST & where it is defined?

GST is defined in Clause (12A) of Article 366 of the Constitution of India and it is defined as:

‘“Goods and Service Tax” means any tax on supply of goods, or services or both except Taxes on supply of the alcoholic liquor for human consumption’.

From the above definition we can conclude that Alcoholic Liquor which is used for human consumption is excluded from the definition unless specified.

What are Goods under GST ?

Definition of Goods is defined under Clause (12) of Article 366 of The Constitution of India as:

   “Goods” includes all materials, commodities, and articles’.

So, it is clearly stated every commodity, material and article is covered under GST except Alcoholic liquor for human consumption.

What is Service under GST?

‘ “Service” means anything other than goods’

Power to government

A new article has been introduced in The Constitution of India i.e.  Article 246A to provide powers to good and service tax. In this Article new provision has been made with regards to subject matter of laws made by the Parliament and exclusive power to make laws with respect to any matter enumerated in List I in Seventh Schedule. Legislature of State has also a exclusive power to make laws with respect to matters listed in List II, this is stated in clause (3) of this article. And in Clause (2) it is provided that Parliament and Legislature of states both have power to make laws with respect to matters enumerated in List III.

Article 246A also states that Parliament has exclusive power to make laws with respect to goods and services tax when transaction is in the course of Inter State Trade or Commerce i.e. only Parliament can make provisions or changes in Integrated Goods & Service Tax Act.

Is there any good or service which is not covered under GST?

Yes, according to the Article 366 (12A) of The Constitution of India only alcoholic liquor for human consumption is not covered under GST.

According to the Entry No. 84 of List I of the Seventh Schedule of The Constitution of India which is amended by Constitution 101st Amendment, there are certain goods on which GST is not levied but these goods are covered under GST.

The Entry No. 84 after amendment is stated as :

Duties of Excise on the following goods manufactured or produced in India namely:-

  1. Petroleum crude;
  2. High speed diesel;
  3. Motor spirit (commonly known as petrol);
  4. Natural gas;
  5. Aviation fuel;
  6. Tobacco and tobacco products.”

Thus power to levy duty on goods manufactured in India is available only in respect of the above products to Central Government.

According to the  Article 279 clause (6) of the Constitution of India, GST Council may recommend the date on which GST shall be imposed on the products listed above. And once GST is imposed on the said products no other duty shall be levied.

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