Amid concerns of missing the GST rollout deadline of April 1, the government today came out with a report card detailing the efforts being made to reach a consensus on support legislations for timely implementation of the new indirect tax regime.
“All efforts are being made to meet the necessary deadlines to ensure that GST is rolled out by April 1, 2017,” said the Finance Ministry’s report card on GST implementation.
The GST Council, which took over the job of rolling out the new indirect tax regime after the Parliament passed the Constitutional amendment and half of the states ratified it, has taken major decision on fixing tax rates, compensation to states and threshold of exemption.
The Council, headed by Finance Minister Arun Jaitley and comprising representatives of all states, has been “very cordial and all decisions till now have been taken by consensus.”
“As compared to the time taken in arriving at a consensus on the Constitutional Amendment Bill for GST, the subsequent events after the passing of the Bill indicate that the Government of India and the states have done remarkably well in taking all necessary steps for implementation of GST,” it said.
The government lost no time in implementing the Goods and Services Tax (GST) so far and a number of important decisions have been taken in six meetings of the Council, the report card added.
The Finance Ministry’s statement comes days after the GST Council for the third time failed to arrive at a decision on administering the new indirect tax regime which will have shades of both central and state levies.
“At present, agenda items pertaining to GST related draft laws and provisions for cross empowerment to ensure single interface under GST are under consideration of the GST Council.
“99 Sections the Model GST Law have already been considered by the Council and remaining Sections will be discussed in the next meeting of the Council scheduled for December 22-23, 2016,” it said.
The last GST Council meeting on December 11 could not find time to discuss the all important issue of cross-empowerment.
“Members of the Council are participating in the meetings with a very positive attitude and are working towards the roll-out of GST as per the deadline,” the statement added.
The GST Council in its first meeting had decided that GST would be rolled-out by April 1, 2017, it said.
Various timelines had been decided for different aspects of implementation of GST such as recommendation of the Model GST Laws by the GST Council and its passage by the Union Parliament and State Legislatures, the development of front-end Information Technology (IT) modules on the common GST portal and the back-end IT systems, it said.
Also included in the schedule are testing and integration of GST front-end and back-end IT systems of all stakeholders, training of both Central and state tax officials and sensitisation of trade, industry and consumers.
The statement said that the government is making efforts to meet the deadlines to roll out the new indirect tax regime from the next financial year.
Listing out the progress so far, the ministry said as soon as the President’s assent was received on the Constitutional Amendment Act for GST on September 8, 2016, the GST Council was created by the Cabinet within one week along with the Secretariat.
Under Article 279A of the Constitution, the GST Council has been entrusted with the power to make recommendations to the Union and states on various GST related issues, the threshold limit of turnover below which goods and services may be exempted from GST and the rates including floor rates with bands of GST.
Since notification of the GST Council on September 12, 2016, six meetings have been held.
During these meetings, number of important decisions have been taken paving way for timely rollout of GST, it said, adding the threshold limit for exemption from levy of GST has been fixed at Rs 20 lakh for normal states and Rs 10 lakh for Special Category States.
The threshold for availing the Composition scheme has been fixed at Rs 50 lakh while service providers have been kept out of the composition scheme.
To compensate states for 5 years for loss of revenue due to implementation of GST, the base year for the revenue of the state has been fixed at 2015-16 and a fixed growth rate of 14 per cent would be applied to it.
The Council has also approved the Draft GST Rules on registration, payment, return, refund and invoice, debit and credit notes.
All entities exempted from payment of indirect tax under any existing tax incentive scheme would pay tax in the GST regime and the decision to continue with any incentive scheme shall be with the concerned state or Central Government.
In case any state or Central government decides to continue any existing exemption/incentive scheme, it will be administered by way of a reimbursement mechanism.
The Council fixed bands of rates of goods under GST at 5, 12, 18 and 28 per cent. In addition, there would be a category of exempt goods.
Further, it was decided that a cess would be levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the rate of 28 per cent for payment of compensation to the states.