After 12 meetings over the last six months, the Goods and Services Tax (GST) Council, which is represented by Union ministers and officials and state finance ministries, on Thursday finally gave its nod to all the five draft legislations needed for implementation of the unified indirect tax.
This paves the way for the model laws – central GST (CGST), state GST (SGST), integrated GST (IGST), Union Territory GST (UTGST) and Compensation Act – to be presented in the ongoing Budget session of Parliament after it is approved by the Union Cabinet.
Union Finance Minister Arun Jaitley said with the approval of these model laws, four of them – CGST, IGST, UTGST and Compensation Act – would be “expeditiously taken to the Lok Sabha” and expected the states to do the same with SGST.
“Four of these laws – CGST, IGST, UTGST and Compensation Laws – will be required to be passed by Parliament, so in the first instance these laws under the Constitution amendment approved by the GST Council will now be taken to the Cabinet and after the Cabinet’s formal approval they’ll be taken to the Lok Sabha. We will try and do that expeditiously. The SGST law will be taken by the respective state governments through its Cabinets to the respective state Assemblies. I am sure, states will be doing it expeditiously,” the minister told the media after the meeting.
Jaitley said the next of the Council will be held on March 31, when four of the draft rules and regulations for the GST would be taken up for discussion.
Of the nine sets of GST rules, five relating to registration, payment, refunds, invoices and returns have already been approved. The Council will look at rules for composition, valuation, input tax credit (ITC) and transitions at the thirteenth meeting.
He said after finalising the draft regulations for the GST, the Council would then work on the fitting various goods and services under different tax slabs.
“We intent to, immediately after March 31, once the rules are approved, take up the exercise of fitment of slabs at the next meeting itself. So, we will have sufficient buffer in terms of time between the entire preparatory exercise and the July 1 which is tentatively date fixed for implementation,” said Jaitley.
The Council has also decided to cap the cess, which is part of the Compensation Act, at 15%. In its earlier meeting, it had said cess will be loaded on 4-5 sin and luxury goods like tobacco, cigarettes, high-end cars, aerated drinks and pan masala for funding the compensation, which would be paid to states. The Central government has agreed to make good losses of states due to GST in the first five years of its implementation.
