Council approves state and Union Territory GST laws
- Author: Eleanor Harrison Mar 17, 2017,
Mar 17, 2017, 0:54
The GST Council chaired by Union Finance Minister Arun Jaitley on Thursday approved the drafts of the remaining two key laws namely - State GST and Union Territories GST. 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. The panel at its last meeting had approved the final draft of central GST (C-GST) and integrated GST (I-GST) laws. The Council headed by Union Finance Minister Arun Jaitley also comprises representatives of all states.
"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.
These rules, including those on registration, payment, refunds, invoices, returns, valuation and input tax credit, will be finalized in the next meeting of the GST council on 31 March. He said that for the objective of empowerment, cap of cess on demirit goods on top of peak rate of the taxation law has been kept at 15 per cent. For the legislative rollout of the GST, approval from the Lok Sabha and Rajya Sabha will be required. The cess on colas and cars has been capped at 15%, which means that the total tax incidence on sweetened drinks and cars can not be more than 43% (tax rate of 28%+cess of 15%).
A maximum cess on mineral water and aerated drinks will be at 15%; while a cap on cess on "pan masala" will be levied at 135%, the governement official said.
The development in the comes on the 12th council meeting held in the capital.
The SGST, which will allow states to levy the tax will have to be passed by each state Assembly.
On the other hand, Jaitley, however, said, "The fitment relating to item-wise GST rates will now be worked by a committee of officers". "We will have a sufficient buffer in terms of time between the entire preparatory exercise and July 1 date fixed for implementation", he said, adding that the progress was in the "right direction".
After the March 4-5 meeting, Jaitley expressed confidence in sticking to the July target to implement the GST, which has missed several deadlines.
The council also decided to make the tax treatment of items produced in special economic zones (SEZs) similar to that on exports.
Sources said that the Council also decided that supplies made to special economic zones would be zero rated (a tax rate of zero) and considered as physical exports.
However, on pan masala and tobacco, the cess caps were a high 135% and 290%, respectively.