NEW DELHI: The prospects of the Goods and Services Tax (GST) rollout on the scheduled date of July 1, 2017 improved with the all-powerful GST Council clearing the final draft of two GST Bills – Central GST (CGST) and Integrated GST (IGST) – at its 11th meeting on Saturday.
The Council, headed by Finance Minister Arun Jaitley, with representatives from all states, will meet again on March 16 to take up the State GST (SGST) and Union Territory GST (UTGST) laws. It had cleared the crucial compensation law in its 10th meeting last month. The GST Bills, once approved by the Council, will be collectively sent to the Cabinet for clearance. Thereafter, they will be tabled in Parliament.
In the Saturday meeting, the Centre accepted 26 changes sought by the states to clear the laws and expedite the process.
GST is a single, national-level tax that will replace a plethora of Central and state taxes. It is a consumption-based tax levied on sale, manufacture and consumption on goods and services at a national level. Under this law, CGST will be levied by the Centre, SGST by states and IGST on inter-state supply of goods and services.
IGST, CGST, UTGST and the compensation law (to compensate states for revenue losses arising from a transition to GST) will need Parliament’s approval. SGST, on the other hand, will require the nod of the State Assemblies.
The SGST Bill will be circulated by the legal committee in the next three days among states to get approval from state legislatures. The SGST will allow states to levy the tax after value-added tax and other state levies are subsumed in the GST.
“The laws would be before Parliament in this session and subject to approval, July 1 looks like a possible date for implementation of GST,” said Jaitley. The model GST law will have a clause to enable levy of up to 40 per cent tax (20 per cent by the Centre and an equal amount by states), but the effective tax rates will be kept at the previously-approved levels of 5, 12, 18 and 28 per cent.
The higher cap is to obviate the need to go to Parliament in case the levy is to be raised on certain goods and services in future.