GST Council to finalise rules for new tax regime
The Lok Sabha yesterday cleared four supplementary GST legislations -- Central GST (CGST), Integrated GST (IGST), Union Territory GST (UTGST) and the Compensation law.business Updated: Mar 30, 2017 19:31 IST
With GST rollout looking imminent from July 1 after the Lok Sabha’s approval, the Centre and states will on Friday sit together to finalise rules and regulations of the new indirect tax regime.
The Lok Sabha yesterday cleared four supplementary GST legislations -- Central GST (CGST), Integrated GST (IGST), Union Territory GST (UTGST) and the Compensation law.
These laws would have supporting rules which would be notified by the Centre and states before the Goods and Services Tax (GST) is implemented.
The GST Council has already approved five sets of rules relating to registration, payments, refund, invoice and returns.
However, these rules would still require some minor tweaking as the legislations were approved by the Council earlier this month and the five set of rules were framed before that.
There are four more rules on composition, valuation, input tax credit and transitions which will be discussed in tomorrow’s meeting of the Council.
Before the formal meeting of the GST Council, the officers committee will meet and deliberate on the rules.
Officials said that the similar set of rules for registration, payment of tax, returns, invoice, filing of refund could be clubbed together and presented before the Council.
The GST will subsume excise, service tax and other local levies. Existing service tax, excise and VAT assessees would have to migrate to the new tax regime by registering on the GSTN portal.
As many as 60% of those assessees have already migrated to the Goods and Services Tax Network.
The GST Council has recommended a four-tier tax structure-- 5, 12, 18 and 28%. On the highest rate, a cess will be imposed on luxury and demerit goods to compensate states for revenue loss in the first five years of GST implementation.
A 15% cess cap would apply on luxury cars and aerated drinks. On pan masala, the cess has been capped at 135% ad valorem.
Tobacco cess will be capped at a mixture of Rs 4,170 per 1,000 sticks or ad valorem of 290%. Cess on coal would be at Rs 400 per tonne.
However, the Central GST (CGST) law has pegged the peak rate at 20% and a similar rate has been prescribed in the State GST (SGST) law, which takes the peak rate to 40% which will come into force only in financial exigencies.
The government has already set up 10 working groups to understand issues faced by trade and industry in various sectors to ensure a smooth transition to GST regime.