The GST Council has cleared all the five draft laws necessary for implementing the new indirect tax regime Goods and Services Tax from July 1 2017, setting the stage for one of the most audacious tax reforms since independence simultaneously at the Centre and 29 states.
The Council has now okayed the five legislations -- the State GST (SGST) and the Union Territory GST (UTGST) bills, Compensation Bill, Central and Integrated GST Bills.
The draft laws will now have to be cleared by Lok Sabha where the GST has been introduced as a Money Bill and in respective state assemblies.
"The Council has now granted its formal approval to all the five legislations. Four of these laws --IGST, CGST, UTGST and the Compensation Law will be required to be passed by the Central Government .and the SGSTs by the respective state Governments. Before that, these laws which come into force by the Constitutional Amendment will be first approved by the Cabinet...then they will be taken to the Lok Sabha. We will try and do that expeditiously," finance minister Arun Jaitley told media.
Delhi deputy CM and Finance Minister Manish Sisodia said a July roll out now looked feasible.
Now with the completion of the legislative exercise, Jaitley said there are two important actions that need to be done -- formulations of the rules and fitment of the commodities into the tax slabs.
In the GST, there are 9 sets of Rules and & Regulations which were to be approved. The laws relating to, registration, payments, refund, invoices and returns have already been approved.
"Four other set of laws now need a formal approval , these relate to composition, valuation, input tax credit and transitions. When these four will be approved, there will be some marginal corrections which will be needed to approved for the earlier five laws by the Council. For that purpose, the officers committee will be preparing the draft of the four regulations and the corrections of the earlier five regulations. To consider that and approve them, we will be meeting in Delhi again for the 13th meeting of the GST Council on the 31st of March. After these rules are approved, one major action will be to with regard to fitment of various commodities into tax slabs. And the meeting that is held thereafter will be approving the slabs", the Finance MInister said while giving a roadmap of the GST implementation.
He said "once that is done, We will be ready for the GST implementation. Hopefully immediately after 31st March, once and rules are approved we intend to take the fitment of slabs itself at the next meeting. So we will have a sufficient buffer in terms of time between the entire preparatory exercise and the 1st of July which is tentatively the date fixed for implementation. "
"We feel we can meet the deadline because all the progress are being made in the correct directions", he added.
GST which basically replaces several taxes in the Central and state Government, and needs agreement of states and Centre on indirect tax revenue proceeds has been identified as a top priority by the Narendra Modi Government and its successful implementation, after having missed few deadlines, will give the Government's edge in international investor confidence and stitching the tax leaks as well simplifying the indirect tax structure.