In an attempt to allow for a smooth passage of the Goods and Services Tax (Constitutional Amendment) Bill in the Rajya Sabha, the cabinet has approved to drop the 1 percent additional tax and also to guarantee states compensation for any revenue loss in the first five years of rollout.

• Concurrent powers to union and state legislatures to legislate on GST.
• A goods and services tax council will be created as a joint forum of the centre and the states. The council would make recommendations to the union and the states on important issues like tax rates, exemptions, threshold limits, dispute resolution modalities, among others.
• Central taxes like central excise duty, additional excise duties, service tax, additional customs duty and special additional duty of customs, etc. will be subsumed in GST.
• At the state level, taxes like vat/sales tax, central sales tax, entertainment tax, octroi and entry tax, purchase tax and luxury tax, etc. would be subsumed in GST.
• All goods and services, except alcoholic liquor for human consumption, will be brought under the purview of GST. Petroleum and petroleum products have also been constitutionally brought under GST. However, it has also been provided that petroleum and petroleum products shall not be subject to the levy of GST till notified at a future date on the recommendation of the GST council.
• Both centre and states would simultaneously levy GST across the value chain.
• The centre would levy and collect the integrated goods and services tax (IGST) on all inter-state supply of goods and services.