NEW DELHI: The Goods and Services Tax (GST) Council at its 12th meeting on Thursday agreed on all the provisions of State GST and Union Territory GST draft Bills. With this, all the five enabling draft laws stand approved by the GST Council and the government’s resolve to launch the indirect tax reform by July 1 appears to be on track. In its previous meetings, the Council had cleared three draft laws — Integrated GST (IGST), Central GST (CGST) and compensation draft laws.
Once GST is implemented, states and the Centre will collect the same rates of taxes on goods and services. If the GST law stipulates that a product or service will attract 12 per cent tax, then both the states and the Centre will get six per cent each under CGST and SGST.
The Centre will also levy and collect the IGST on all inter-state supply of goods and services. This has been kept in the law to ensure seamless flow of input tax credit from one state to another.
The Centre is confident that the new tax regime will become operational from July 1. Thursday’s GST Council meeting also approved the proposed cess on ‘demerit’ or sin goods such as tobacco, alcohol and aerated beverages, capped at 15 per cent. The cess would be levied for five years and can be continued longer. The Council has kept the option open for levying cess on any residual item as and when decided by the Centre and states.
The GST Council is headed by finance minister Arun Jaitley, who briefed reporters after the meeting on Thursday. Jaitley said all the Bills would now be sent to the Cabinet for approval and will be tabled in the current session of Parliament.
“The GST Council will meet on March 31 for framing rules for the GST regime,” Jaitley added. The critical meeting to complete the slabs for various goods and services will be held after March 31. The Council has already agreed on a four-slab structure — 5, 12, 18 and 28 per cent — in addition to a cess on sin goods.
“The cap of cess on demerit goods on top of peak rate of GST has been kept at 15 per cent, but effectively it will be only 12 per cent,” Jaitley said.