GST Council clears the decks for July 1 rolloutTeam YS
After the GST Council passed the legislations, they will now have to be passed by Parliament and all State Assemblies to become law.
A nationwide Goods and Services Tax (GST) rollout by July 1 this year seems likely, as the GST Council passed four pieces of supporting legislation and ironed out most differences that had plagued the measure so far.
With this, the Bill will be taken up by the Cabinet for its approval and will be introduced in the Lok Sabha for passage in the current session itself.
Meanwhile, all states will have to pass the state GST laws for the Bill to become law.
Finance Minister Arun Jaitley, while briefing reporters after the GST Council meet last night, said that four pieces of supporting legislation had been cleared by the council so far - the Central GST, Integrated GST, Union Territories GST, and Compensation laws.
“The State GST laws will simultaneously go to state cabinets and their legislatures. We are hoping that all the states will get their laws cleared by Assemblies expeditiously. The government will try and get the supporting laws passed by Parliament in this session itself.”
This move will pave the way for a unified system of taxation from July 1.
Most states have started the exercise of their respective sales and commercial taxes departments sensitising traders on how to move forward and integrate e-filing into the expected GST regime.
At its meeting, the GST Council capped the cess on four items, including luxury and sin goods, at 15 percent, while the cap was as high as 135 percent on pan masala and 290 percent on tobacco. Jaitley explained that cess on luxury goods will remain at 12 percent, but the cap was fixed higher taking future adjustments into consideration.
Most states that were opposing the GST and asking for a greater share, such as Tamil Nadu, have managed to resolve their issues. Karnataka has asked for bidis, or the poor man’s cigarette, not to be exempted, as the state is a major producer and exporter of bidis, which account for a good share of its revenue. The Council has so far not taken any decision on the matter.
With these steps, the GST is ready for a July 1 rollout, which seemed impossible a few months ago as various pieces of related legislation were stuck due to a lack of consensus and Parliamentary numbers, as well as states opposing the move or wanting to include their own items on the list.
The GST Council will meet again on the last day of this financial year to pass valuation, transition, and IT rules for the GST rollout.