The Goods and Services Tax (GST) Council headed by Finance Minister Arun Jaitley is expected to endorse the remaining two crucial bills — State GST (SGST) and Union Territory GST (UTGST) — on Thursday. The Council’s nod will act as another decisive step in the run up to the implementation of the overhauled tax regime from July 1.
Final drafts of the three other bills — Integrated GST (IGST), Central GST (CGST) and Compensation bill — have been cleared by the Council.
A legal committee of the Council is finalising the SGST bill and the draft is being circulated to the state assemblies for the final nod. Thereafter, all the five draft laws will be sent to the Cabinet for approval and subsequently to Parliament which is in session for final nod.
Consent from both Lok Sabha and Rajya Sabha would conclude the legislative requirement for GST rollout.
Once the laws are passed, another key meeting to present the slabs for various goods and services before the Council will take place.
The industry has been particularly looking as to how items would be categorised under various slabs as they need at least two-three months to prepare themselves to adjust to the shift in tax regime.
The Council has agreed on a four-slab structure — 5, 12, 18 and 28 percent — along with a cess on luxury and ‘sin’ goods such as tobacco.
Under the GST, the states and the Centre will collect identical rates of taxes on goods and services. For instance, if 18 percent is the GST rate on a product, both the states and the Centre will get 9 percent each called the CGST and SGST rates.
The Centre will also levy and collect the IGST on all inter-state supply of goods and services. The IGST mechanism has been designed to ensure seamless flow of input tax credit from one state to another.