Rate Slabs For Individual Goods & Services Under GST After March 4-5: Arun Jaitley
GST council gave final clearance to the GST compensation bill at the meeting on Saturday.
A decision on which rate slabs would apply to which goods and services will be taken after the next meeting of the GST council to be held on March 4-5, said Finance Minister Arun Jaitley after a council meet in Udaipur on Saturday.
The meeting was intended to give the final go-ahead to supporting legislation needed for the implementation of the of the Goods and Services Tax (GST). While one such legislation was cleared, another three will be taken up at the next meeting of the council.
The GST compensation law has been passed formally by the council and it is now ready to go to Parliament, said Jaitley at a press briefing. In the case of the Central GST (CGST) Bill, the State GST (SGST) Bill and the Integrated GST (IGST) Bill, the council discussed some issues that had come up during the legal vetting process and gave its views, said Jaitley. These views will now be incorporated and the council will likely approve these changes at the March 4-5 meeting, he added.
According to a person familiar with the matter, a separate draft law for Union Territories would be drafted along the lines of the State GST Bill.
The key issue that remains to be worked on is a decision on which goods and services get taxed at what rate.
“After 4-5 March, officers will start fitting items into slabs. One major meeting after 4-5 March is needed to approve these slabs,” said Jaitley.
The Council has finalised a four-rate structure under which goods and services will be taxed. The rates have been set at 5, 12, 18 and 28 percent, with an additional cess over and above the highest tax rate for demerit goods.
Also Read: A Common Man-Friendly GST Rate Structure
The government is hoping to introduce the Model GST Law in Parliament in the second half of the Budget Session beginning from March 9.
At its last meeting, the GST Council had cleared the contentious issue of administration of tax assessees. It was decided that assessees with an annual turnover below Rs 1.5 crore will be divided between the states and centre in the ratio of 90:10. Those with an annual turnover above Rs 1.5 crore will be divided equally between the states and the centre.
Commenting on the outcome of the meeting, Thomas Issac, the finance minister for Kerala said that there was complete agreement on the compensation bill. The source for the compensation funds will be the cess on upper bracket GST goods, said Issac. If that is not sufficient, money would be borrowed and states would be paid, he added.
Manish Sisodia, deputy chief minister of Delhi said that other issues including the anti-profiteering provision were not taken up. Some of these issues will be taken by at the next meeting.
Some of the main provisions of the CGST and IGST, which have been legally vetted, have been cleared, said Sisodia on the sidelines of the council meeting. Those that are yet to legally vetted will be discussed at the next meeting, he added.
Having cleared the compensation law at the council level today, it is a must to ensure that IGST, CGST and SGST bills are also cleared at the earliest by the Council along with the tax slabs for commodities. The same should only be shared with the industry after clearance so that they can carefully assess its impact in entirety and plan smoother transition ahead of July deadline.Krishan Arora, Partner, Grant Thornton India LLP
In a written statement, Yanamala Ramakrishnudu, finance minister of Andhra Pradesh brought up the issue of taxation powers in territorial waters. The state’s position is that territorial waters should be seen as the territory of state and powers to levy ,collect and appropriate taxes should lie with the states. The chairman agreed to refer to Law Committee to examine it, said Ramakrishnudu in the statement.