Latest
Recommended
Published: Sun, February 19, 2017
Economy | By Melissa Porter

GST council clears draft for compensating states for loss of revenue

GST council clears draft for compensating states for loss of revenue

GST council meet took place on Saturday in Udaipur, wherein the Draft Compensation Bill was approved. These bills will now be taken up in the next meeting of the GST council on 4-5 March in New Delhi.

The government plans to introduce the model GST law in Parliament in the second half of the Budget Session beginning next month.

The two legislation - the Central GST and Integrated GST bills - deal with the Centre's powers to replace excise duty and service tax with the GST.

The draft law was cleared in the 10th GST Council meeting.

The key issue that remains to be worked on is a decision on which goods and services get taxed at what rate. The model GST law provides a common draft of CGST Act, SGST Act. It has been glorified as an amalgamation of all indirect taxes to be paid on sale, manufacture and consumption of goods and services on a national level.

"After the meeting on March 4 and 5, we hope to table the legislative laws in Parliament in the second half of the Budget session which begins on March 9", he said.

The draft laws once passed by Council, will have to be passed by Parliament. For the rest of the laws, clarifications have been given on some of the questions raised during legal drafting. "That will also be discussed in March 4-5 meeting", the FM said.

Many contentious issues sorted out today.

The Goods and Service Tax Council is meeting today (February 18, 2017).

The proposed tax regime will create a unified, common market that will help lower the tax burden, shore up revenues of the Centre and states, temper inflation and step up economic growth by 1-2 percentage points in the medium term, analysts say. An array of 53 clauses have been approved, according to officials.

Addressing the issue of CAG audit of tax receipts from GST, Finance Minister Arun Jaitley said that the council decided against giving auditing powers to CAG under the Indirect Tax Act, making it clear that CAG already has powers to check finances under the CAG Act. It means it does not seek to overburden end consumers with an over-rated GST. The last meeting of the council was held on January 16 wherein the states were allowed to tweak taxpayer division after consulting Centre. The Union Minister of State for Finance and Corporate Affairs has stated that there is no major hurdle to roll out GST by July 1, 2017, since the required procedures can be completed in time and since States have been co-operating.

Like this: