Published: Sun, March 05, 2017
Tech | By Constance Martin

FM-led GST Council clears CGST, IGST provisions

FM-led GST Council clears CGST, IGST provisions

Jaitley made the remarks after the 11th GST Council meet. The Centre wants to bring these bills in the second half of the Budget session that starts next week as it wants to stick to the July 1 deadline to rollout GST. But political differences over how to divvy up GST revenues or compensate states for lost income because of the new tax held up progress.

Under the GST norms, restaurants with an annual turnover of less than Rs 50 lakh will be able to avail of a composition scheme and pay a flat tax of 5% (2.5% central GST and 2.5% state GST) as the GST Council chose to widen the ambit of this scheme. However, the effective tax rate applicable will be as per the earlier agreed structure of 5, 12, 18 and 28 percent.

Yet, there are various steps required to be completed for the implementation of GST, including the approval of the GST laws by the GST Council (which one hopes will be achieved before this week ends), passage of the GST laws in the Parliament, classification of all goods and services across the various tax rate slabs, enacting of the laws by the States, complete migration or enrolment of tax-payers, etc.

The remaining two Bills namely, State GST and the Union Territory GST, which would be nearly a replica of the CGST Act, would be taken-up for approval in the next meeting of GST Council scheduled on March 16 2017.

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This is only an enabling provision and the highest rate levied on goods will still be 28% (14% central GST and 14% state GST). The effective peak rate will continue to remain at 28 percent.

The meeting of GST Council is underway in New Delhi to finalise supplementary legislations headed for Parliament which resumes next week, so that the new regime is rolled out from 1st of July.

The government will now introduce the model GST law, which provides a common draft of CGST, SGST, IGST, UTGST and Compensation Law, in Parliament in the second half of the Budget Session beginning next week, the CNBC report said.

This is done to obviate the need to go to Parliament in case the levy has to be raised on certain goods and services. "So the applied rate is going to be what the council has decided".

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