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GST Council approves compensation law for states
20
Feb '17
The Goods and Services Tax (GST) Council approved the compensation law for states to make up for the revenue loss that states will face after the implementation of the sales tax at the meeting held on February 18. The Council has decided to approve the enabling laws, that is, Central GST (CGST), State GST (SGST) and Integrated GST (IGST) in the next meeting.

Compensations will be provided to the states for the first five years after the GST roll out. The law will be presented in Parliament for approval during the second half of the Budget session that starts on March 9.

After approving the laws, the Council will begin deciding rates for various goods and services by placing them into the pre-decided slabs of 5 per cent, 12 per cent, 18 per cent and 28 per cent, said media reports quoting finance minster Arun Jaitley.

The Centre and states will levy CGST and SGST, respectively, while the IGST will be levied on goods and services exchange between states. Indirect taxes like central sales tax CST, central excise duty and service tax will come under CGST, while entertainment tax, luxury tax, VAT and state sales tax will be merged with SGST.

The Council agreed on the enabling laws, but the approval was held up due to the legal language of some of the clauses, added Jaitley. About 53 clauses have already been approved.

Jaitley hopes that CGST and IGST also goes to Parliament for approval during the month-long Budget session.

As for the SGST, it needs to be approved by all the state legislative assemblies.

The anti-profiteering clause included in the draft law, which ensures that benefits from lower taxes are shared with end users, was not discussed in the meeting.

Merely minor legal vetting of the draft law is remaining and it will be circulated to the states after getting its legal language right, said the officials. The circulation is likely to begin by March 1.

A UTGST law, similar to the SGST, will also be formulated for the Union Territories. (KD)

Fibre2Fashion News Desk – India


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