The GST Council today met in New Delhi to approve rules for the new indirect tax regime. The council chaired by union finance minister, Arun Jaitley is the highest decision making body for the Goods and Services Tax (GST).
With today’s meeting the council has approved all nine sets of rules required for implementing GST.
“Today we discussed four set of rules--GST input tax credit rules, valuation rules, transitional provisions and composition rules,” finance minister Arun Jaitley said.
The tentatively approved rules will be put up for public comments and industry can send their suggestions. The rules will be taken up for final approval in the next meeting.
The council has already approved rules on registration, return, payment, refund, invoice, debit and credit but they have to be altered to bring them in conformity with those provided in the GST Bills, explained Jaitley.
“The next meeting will be held on May 18-19, where besides these rules being given final approval, the rates of individual commodities will be taken up for consideration. It will be held in Srinagar,” he said.
The rates in the four-slab structure of the GST will be 5%, 12%, 18% and 28%. A cess on certain goods will also be levied to create a fund for compensating states for any revenue loss in the first five years of the new tax regime.
The Lok Sabha on Wednesday had passed four bills to pave the way for Goods and Services Tax (GST) implementation.
The bills are the Central Goods and Services Tax Bill (CGST), the Integrated Goods and Services Tax Bill (IGST) the Goods and Services Tax (Compensation to States) Bill and the Union Territory Goods and Services Tax Bill (UTGST).
Once the bills are passed in by both houses of Parliament, the government will issue a notification after the President’s consent. The states will then pass a separate law — the State GST (SGST) bill — to roll out the reform.
The passage of the bills removed years of political differences over the GST that will eliminate tax barriers, and subsume a host of indirect taxes levied by the Centre and the states, including excise, service tax, entertainment, entry, luxury and value-added taxes. And now with all GST-related rules being approved by the council, India is all set to rollout the biggest tax reform since Independence, and also keep the July 1, 2017, deadline.
More than a decade in the making, the GST is expected to shore up government revenue and spur economic growth by 1-2 percentage points. The government has gone on record to state that the tax burden will be reduced, but experts say the GST will stoke inflationary trends in the initial years.