GST laws ready for Parliament, State Assemblies
- Author: Todd Kelly Mar 17, 2017,
Mar 17, 2017, 0:56
Clearing the decks for introduction of a major indirect tax reform in Parliament, the Centre and States on Thursday approved draft Bills for implementing the goods and services tax (GST) in States and Union Territories (UTs). The government is hoping the C-GST, the I-GST, the UT-GST and the GST Compensation laws will be approved in the current session of Parliament and the S-GST by each of the state legislatures soon to help roll out the new indirect tax regime from July 1. Previously, the Council had also approved a draft Bill to compensate States for any revenue loss arising out of GST for a period of five years.
"With all five draft laws now being given the green signal by the Council, they will next be sent to the Cabinet for approval and subsequently to Parliament, which is currently in session, for the final nod", he said.
Asserting that the implementation of the GST bill will be from July 1, FM Jaitley said that the tax rates for various goods and services will be taken up after framing the rules. The council will next meet on March 31 to frame rules for Goods and Service Tax regime.
The GST council also agreed to cap the cess on various so-called demerit (or sin and luxury) goods in the legislation.
The GSTcouncil approved two remaining pieces of supporting legislation that will enable states and Union territories to introduce the GST, billed as India's biggest tax reforms.
The unified tax will have four slabs of 5%, 12%, 18% and 28%. "We will try and do that expeditiously", finance minister Arun Jaitley said after Thursday's meeting of the council, which has representatives from all states.
The environment cess has been capped at Rs 400 per tonne. "The SGST law now will be taken by the respective state governments through its cabinets to the respective state assemblies", he said.
The council has taken a tough stand on the pan masala consumption, and has capped the cess at 135 per cent ad valorem. "We will maintain roughly the same leek of tax incidence as it applies today", a finance ministry official said.
On the other hand, Jaitley, however, said, "The fitment relating to item-wise GST rates will now be worked by a committee of officers". For this, the next meeting has been called on March 31.
"Now, we will have the same treatment for any supply made to SEZ as it is made in case of exports".
However, on pan masala and tobacco, the cess caps were a high 135% and 290%, respectively. "It will be too short a time for the industry for preparation if the states are not passing GST law latest by second half of April", said Sachin Menon, national head (Indirect Tax), KPMG in India.