GST, which was first mooted by the UPA government in 2006, is expected to streamline the taxation system and cut down multiplicity of compliance and cascading effect of taxes.
The passage of the Constitution Amendment Bill in the Lok Sabha will ensure GST implementation by April 2016, but first it has to pass muster in the Rajya Sabha, experts said.
"Now, even if the Bill goes to a select committee of the Rajya Sabha, one would hope that GST meets its deadline of April 1, 2016," KPMG India Partner (Indirect Tax) Pratik Jain said.
The industry would get very less time to prepare for this major transformation in the indirect tax regime, he said.
The Goods and Services Tax (GST), which is proposed to be implemented from April 1 next year, will subsume excise, service tax, state VAT, entry tax, octroi and other state levies.
"It seems reasonable to assume that the BJP is confident of getting the Bill approved by the Upper House of Parliament and by the half the states as well," PwC India Leader (Indirect Tax) Vivek Mishra said.
After the Rajya Sabha, being a Constitution Amendment, it will have to be vetted by more than half of the 29 state assemblies.
GST, which was first mooted by the UPA government in 2006, is expected to streamline the taxation system and cut down multiplicity of compliance and cascading effect of taxes.
"Passing of the Constitution Amendment bill in the Lok Sabha today is a momentous milestone towards introduction of the Goods & Services Tax in India. GST is a mammoth tax reform that should usher in with it tax efficiencies and streamlining of businesses," Deloitte Senior Director Saloni Roy said.
While winding up the debate on the Constitution Amendment Bill on GST in the Lok Sabha, Finance Minister Arun Jaitley said the states would be compensated for any revenue loss and assured that the new uniform indirect tax rate will be much less than 27 per cent recommended by an expert panel.
"The statement that revenue neutral rate is expected to be significantly diluted allays fears of the industry and is welcome," BMR & Associates Leader (Indirect Tax) Rajeev Dimri said.
GST would give concurrent power to the Centre and states to levy tax on goods and services.
"The Lok Sabha passing the Bill brings GST closer to reality. It's also an indication that there is broad based alignment on GST among major political parties," Jain said.
The idea of moving towards GST was first mooted by the then Union Finance Minister P Chidambaram in his Budget for 2006-07. Initially, it was proposed that GST would be introduced by April, 1, 2010.
GST has missed several deadlines as there was lack of consensus between the Centre and states on various issues, including compensation to states.
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