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Cabinet approves creation of Goods and Services Tax Council, Secretariat

business Updated: Sep 12, 2016 18:46 IST
Timsy Jaipuria
Timsy Jaipuria
Hindustan Times
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The Cabinet on Sep 12. 2016, approved setting up of the GST Council, which will decide on the rate of tax under the new Goods and Services Tax (GST) regime. (AFP)

Racing against time to meet the April 1, 2017, the deadline to implement the country-wide goods and services tax (GST), the cabinet on Monday approved the creation of the GST Council.

The council that is headed by finance minister Arun Jaitley is the main decision-making body, which will finalise the design of the GST, the rates, and help the Centre and states resolve sticky issues by November 22.

“We are geared up to put in place the administrative and IT set-up,” revenue secretary Hasmukh Adhia said. Asked if the government is sticking to the April 1 deadline, he said: “So far, yes.... We will see how we proceed.”

The GST Council will consist of finance minister, minister of state, in charge of the revenue department, and state finance ministers.

The council will hold its first meeting on September 22 and 23, an official statement said.

“The cabinet also decided to provide adequate funds to meet the recurring and non-recurring expenses of the GST Council Secretariat. The entire cost will be borne by the Centre. Officers of the state and central governments will be deputed at the GST Council Secretariat,” the statement said.

“Now it is for the GST Council to thrash out all the issues within two months. We have set a limit of two months, from September 22 to November 22, to discuss and decide all major aspects. We’ll have to see if that is feasible,” Adhia said.

Adhia further said the council would be able to decide the GST rate, exemptions and threshold for inclusion in the CGST law before November 22.

The government is planning to introduce the GST legislations -- Central GST and Integrated GST -- in the winter session of Parliament in November.

Besides, the revenue secretary will be the ex-officio secretary to the GST Council, which will have the chairperson of the Central Board of Excise and Customs as a permanent invitee (non-voting). And the finance ministers of 29 states and two union territories will also be part of the council with voting rights.

Also, a post of additional secretary to the GST Council and four posts of commissioner (at the level of joint secretary to the Centre) have been created in the GST Council Secretariat.

The council will make recommendations to the union and the states on important issues related to the GST, such as the goods and services that may be subjected or exempted from GST, model GST laws, principles that govern the place of supply, threshold limits, GST rates, including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters and special provisions for certain states.

While the Centre will have one-third of the votes in the GST Council, states together will have two-thirds of the votes. They will need a majority of three-fourths to adopt a resolution.

The central and the integrated GSTs will be drafted on the basis of the model GST law. The states will draft their respective state GST laws with minor variation incorporating state-based exemptions. The integrated GST law would deal with inter-state movement of goods and services.