Published: Fri, March 17, 2017
Markets | By Erika Turner

GST Council likely to approve SGST & UTGST bills

GST Council likely to approve SGST & UTGST bills

Now among the pending agenda for the GST council is to approve four rules - composition, valuation, input tax credit and transitions.

The GST Council has approved rules and regulations on registration, payments, refund, invoice and returns, but these may require minor corrections, Jaitley said.

Union finance minister Arun Jaitley talks to West Bengal finance minister Amit Mitra (centre) and Puducherry chief minister V Narayanasami at the GST Council Meeting in New Delhi on Thursday.

Under the GST bill, the states and the Centre will collect same tax rates on goods and services.

There is no cess on bidis as of now.

The unified tax will have four slabs of 5%, 12%, 18% and 28%. Previously, the Council had also approved a draft Bill to compensate States for any revenue loss arising out of GST for a period of five years.

Also, the council agreed on capping cess on demerit goods - so-called sin and luxury products - such as cigarettes, alcohol, colas and cars at 15%.

The goods and services tax (GST) council on Thursday gave its nod to the two remaining pieces of supporting legislation for implementing the landmark tax reform, paving the way for their introduction in Parliament and state legislatures.

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Apart from tobacco, aerated drinks, luxury cars and environment cess, the GST Council has kept the option open for levy of 15 per cent cess on "all other supplies". State cabinets will examine the SGST bill and seek approval of the respective assemblies. GST Council has kept the option open for levy of 15 per cent cess on "all other supplies" "If a luxury vehicle at present commands a total tax of 40 per cent, under the new indirect tax regime, a GST of 28 per cent plus 12 per cent cess would be levied to keep the tax incidence at the same level".

On the other hand, Jaitley, however, said, "The fitment relating to item-wise GST rates will now be worked by a committee of officers".

After these rules are approved, the fitment of various commodities into the tax slabs would be taken up.

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.

The council also decided to make the tax treatment of items produced in special economic zones (SEZs) similar to that on exports.

"We will have a sufficient buffer in terms of time between the entire preparatory exercise and July 1 date fixed for implementation", Jaitley said, adding the progress so far is in the "right direction".

However, on pan masala and tobacco, the cess caps were a high 135% and 290%, respectively.

The GST council has meet from time to time to resolve the issues regarding the implementation of the pan-India tax regime.

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