The Central Cabinet has clarified the process, structure and functioning of the GST Council, which will decide on the scale of taxes under the current indirect taxation regime on Monday.
The GST Council will be chaired by Union Finance Minister and have a Minister of State for Finance and all state finance ministers as its members that have to be introduced by November 11. It will decide on the tax rate, exemptions and threshold limits in the new indirect tax regime, which is assumed to kick in from April 1, 2017.
The government has notified September 12, as the date from which the procedure for setting up of the GST Council will be inducted and which will be completed within 60 days.
According to sources, the Cabinet headed by PM Narendra Modi approved the process, formation and functioning of the GST Council on Monday. The Cabinet also discussed on the constitution of the GST Secretariat and the officers who will execute the judgments of the Council.
Under this council, the Centre will have a one-third vote share, states together will have a two-third share percentage. To adopt the resolution, a three-fourth majority will be needed. The permission came on the day when the Constitution Amendment Act on GST came into effect.
President Pranab Mukherjee granted his approval to the bill last week, flooring the route for setting up of a GST Council.
GST is a single indirect tax, which will subsume most of the central and state levies such as Value Added Tax (VAT), Excise Duty, Service Tax, Central Sales Tax, additional Customs Duty and special additional duty of customs.
Parliament on August 8 had passed the bill, which then went to the states for confirmation. A Constitution Amendment Bill requires has to be approved by the legislative Assemblies of at least 50 percent of the 29 states and 2 union territories. The bill was sent to the President’s secretariat after as many as 19 states. BJP-ruled Assam was the first on the list that ratified the bill.
The other states, which passed the legislation include Bihar, Jharkhand, Chhattisgarh, Himachal Pradesh, Gujarat, Madhya Pradesh, Delhi, Nagaland, Maharashtra, Haryana, Sikkim, Mizoram, Telangana, Goa, Odisha, and Rajasthan.
Revenue Secretary Hasmukh Adhia had recently stated that the government is ahead of agenda for implementation of GST. “Instead of 30 days kept for this (states’ ratification), it is achieved in 23 days,” he tweeted.
Glad to inform that we are ahead of our schedule for implementation of GST so far.Instead of 30 days kept for this it is achieved in 23 days
— Dr Hasmukh Adhia (@adhia03) September 1, 2016
The states and the Centre are operating overtime and communicating to stakeholders to draft the Central GST, State GST, and Integrated GST laws, which have to be passed in Winter Session of Parliament.
The CGST and IGST will be conscripted on the basis of the model GST law. The states will conscript their separate State GST (SGST) laws with the minor variation including state-based exemptions. The IGST law would trade with inter-state transportation of goods and services.