GST Council approves all GST related bills: Key takeaways from 12th GST Council Meet:
The GST Council in its 12th meet has approved remaining two Draft Laws, i.e., State GST (SGST) and Union territory GST (UT-GST). The following are the key takeaways of the meeting:
a) Approval of remaining Draft Bills: In the previous meeting the GST Council approved Central GST (CGST), Integrated GST (IGST) and State Compensation Law. The Council has now granted its formal approval to all the five GST related Draft laws. Now, out of this five draft GST laws CGST, IGST, UTGST and State Compensation Law needed to be passed by the Parliament. The SGST law will be taken by the respective State Government and will be passed by their State legislative.
b) Approval of Draft Rules: There are nine set of draft rules under GST for Registration, Refund, Payment, Invoice, Return, Composition Scheme, Valuation, Input Tax Credit and Transition. The Council had already approved the first five set of rules and there is no discussion on remaining set of rules in this meeting thus remaining rules expected to be approved in next meeting.
c) Rate fitment within decided slabs: The activity relating to GST implementation would only be start after approval of commodity wise formal rates. The GST Council has approved four tier rates, i.e., 5, 12, 18 and 28 percent. The department is working hard to fit goods and services within this slab. The Finance Minister, Arun Jaitley, said that after approval of Rules, GST Council will approve this fitted rates.
d) Capping of Cesses: There would be a levy of GST Compensation cess under the State Compensation law. The collection of which would be used to fund amount of compensation to the States. The provision of Draft State Compensation law which was released in the month of November, 2016 provides as under
“There shall be levied and collected in accordance with the provisions of this Act, a cess to be called the GST Compensation Cess at such rate as may be notified, but not exceeding…. per cent…….,”
Therefore, similar to GST rate there would be cap on GST Compensation Cess. The Finance Minister said that the principle to levy Compensation cess would be the difference of Current total tax rate vis-à-vis applicable GST rate, for example, if current tax burden on a particular sin item is 40 % then applicable cess would be 12% assuming item will fall under category of 28%.
e) Next Meeting: The next meeting of council will be held on March 31, 2017 at New Delhi and Council will approve the remaining Draft rules as stated above.