Following the President’s assent to constitutional amendment enabling the roll-out of the Goods & Services Tax (GST), Finance Ministry has notified the provisions of the Constitution Act, 2016 that will allow setting up of the crucial Goods and Services Tax (GST) Council. The Finance Ministry notification said that the government appointed the 12th day of September, 2016 as the date on which the provisions of section 12 of the Act shall come into force.
According to the provisions of the Constitution Amendment Act, the GST Council will have to be set up within 60 days of its notification. The setting up of the Council is crucial to finalise the modalities of the new tax system. Revenue Secretary Hasmukh Adhia has said that the Finance Ministry will seek approval for setting up the GST Council in the next meeting of the Union Cabinet.
The constitutional body, to be headed by the Union Finance Minister and comprising State Finance Ministers, will decide the rates at which the GST will be levied and collected and have to be paid across the country by consumers. It will also decide the threshold for levy of the tax, the date from which GST will be applicable to petroleum products as well as the dispute resolution mechanism.
GST is a single indirect tax that will subsume most central and state taxes such as value added tax (VAT), excise duty, service tax, central sales tax, additional Customs duty and special additional duty of Customs.
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