GST to be implemented from July 1, says Finance Minister Arun Jaitley
- Author: Fernando Stephens Mar 05, 2017,
Mar 05, 2017, 0:59
In a major announcement, Union Finance Minister Arun Jaitley on Saturday said Goods and Service Tax Council has cleared the Central GST (C-GST) and Integrated GST (I-GST) laws. Subsequently, the bills will be tabled together in Parliament in the second half of the budget session. At the time of stop press, the update is that the GST Council has reached a consensus on the CGST and IGST bills, but the State GST bill could not be discussed - it emerges that some amendments by the Law Department are yet to be incorporated.
"While the passage of the CGST and IGST Bills by the GST Council is a welcome step, it would be have been wonderful if the SGST and UTGST Bills had also been approved", M.S. Mani, Senior Director - Indirect Tax at Deloitte Haskins & Sells said.
Mirroring the model GST law, the CGST, the SGST and the UTGST law will be firmed up by the Centre, states and Union Territories, respectively.
This is the 11th meeting of the Council, which comprises Finance Minister Arun Jaitley and state representatives. The demerit and luxury goods will attract higher 28% rate plus cess.
This means the central GST and state GST can be up to 20 percent each, leaving the scope for a maximum levy at 40 percent.
Under the GST norms, restaurants with an annual turnover of less than Rs 50 lakh will be able to avail of a composition scheme and pay a flat tax of 5% (2.5% central GST and 2.5% state GST) as the GST Council chose to widen the ambit of this scheme. Officials said this "14%" will now be changed to say the rate will not exceed "20%".
The government has already indicated that it is keen to roll out the new regime from July 1 onwards. With the two key legislations cleared by the council, the government now proposes to seek parliamentary approval once the budget session resumes on March 9. As for the eventual rollout, Jaitley added: "July 1 looks possible for rollout of GST; cap rate will be kept at a higher rate; applied rate will be 5, 12, 18, 28 per cent". It has not been decided yet which tax rates will apply to which categories of goods. The UT-GST will also go to Parliament for approval.