Finance Minister Arun Jaitley tabled Goods and services Tax (GST) Bill in Rajya Sabha on Wednesday. Below are some points on what does it mean for you:
1) GST creates one national tax which will replace complex ones that differ from state to state.
2) Rate of the tax will not be decided for another few months.
3) It will reduce prices of some goods like electronic items and two-wheelers. However, services like eating out or using a beauty salon or plane tickets is likely to become more expensive.
4) Lok Sabha cleared the GST proposal in 2015. In the Upper House, it had been stalled mainly by Congress, which wrote the original proposal when it was in power.
5) Finance Minister held several rounds of discussions with Congress to win their support and agreed to changes sought by the Congress.
6) "A larger political consensus is necessary... I am grateful to Leader of the Opposition Ghulam Nabi Azad," Jaitley said referring to the Congress' leader in the Rajya Sabha, acknowledging the support eventually extended by the Congress and other political parties.
7) Proposal that will be cleared by the Rajya Sabha will modify the constitution to make GST a law. At least 15 state legislatures have to pass it too. Only then will the GST Council will come into being.
8) The council, which combines union ministers with representatives of all state governments, will then decide the rate of the tax. 2/3 of voting power of the council is with states and 1/3 with the centre.
9) GST is a consumption tax. States that produce goods then will lose revenue - the taxes they impose presently will be removed. Centre has agreed to compensate them for five years.