Cabinet clears changes to GST Bill, drops 1% additional tax on inter-state sales
NEW DELHI: The Union Cabinet has cleared changes to the Goods and Services Tax (GST) Constitutional Amendment Bill, dropping 1 per cent manufacturing tax and providing guarantee to compensate states for any revenue loss in the first five years of rollout of the proposed indirect tax regime.
The Cabinet, headed by Prime Minister Narendra Modi yesterday, also decided to include in the Bill that any dispute between states and the Centre will be adjudicated by the GST Council, which will have representation from both the Centre and states.
With states on board and the Cabinet approving the amendments, the government is hopeful of passage of the long-pending GST Bill in the ongoing monsoon session of Parliament, which ends on 12th of August.
The Cabinet also decided to abolish existing guidelines for establishment of Joint Venture Companies by Defence Public Sector Undertakings, DPSUs. These guidelines which were notified in February of 2012 will not be required for a separate joint venture for DPSUs. The abolition of the guidelines will provide a level playing field between DPSUs and the private sector.
The Cabinet gave its nod to raise foreign shareholding limit from 5 percent to 15 percent in Indian Stock Exchanges. It approved the proposal to allow foreign portfolio investors to acquire shares through initial allotment, besides secondary market, in the stock exchanges.
The move will help in enhancing global competitiveness of Indian stock exchanges by accelerating and facilitating the adoption of latest technology and global best practices. This will lead to overall growth and development of the Indian Capital Market.
The Cabinet has also approved Bilateral Investment Treaty between India and Cambodia. It seeks to promote and protect investments from either country in the territory of the other country with the objective of increasing bilateral investment flows.
The Cabinet gave its approval for setting up of new All India Institute of Medical Sciences in Bhatinda, Punjab. It will have 750 beds and incur an expenditure of 925 crore rupees. The super specialty hospital will be built under the Pradhan Mantri Swasthya Suraksha Yojana.
