Moving swiftly on the road to formalizing the biggest reform of the indirect tax regime, the GST council at its 10th meeting, chaired by Finance Minister Arun Jaitley and comprising of representatives of all states and union territories, has cleared the Compensation Law that will legally provide for the Centre making up for any loss of revenue to states in first five years of rollout of Goods and Service Tax (GST) regime. The all-powerful GST council also cleared the final drafting of the anti-profiteering clause to ensure benefit of lower taxes gets shared with consumers.
Arun Jaitley said that the council will meet again on March 4 and 5 to finalise crucial draft laws pertaining largely to Central GST (CGST), Integrated GST (IGST) and State GST (SGST), days before the start of the second leg of the Budget Session where the Centre is hoping to get them approved. The Minister also said that after laws are finalized, the council will get down to fixing rates of taxes for different goods and services by fitting them into the four approved slabs of 5, 12, 18 and 28 per cent.
Meanwhile, the government is planning to introduce the model GST law in Parliament in the second half of the Budget Session beginning next month. The government is keen to roll out the new regime from July 1 but for that, it will have to get two laws that are the Central GST (CGST) Act and Integrated GST (IGST) Act approved by Parliament and each of the state legislatives have to pass the State GST (SGST) Act. GST, which will replace a plethora of central and state taxes, is a consumption based tax levied on sale, manufacture and consumption on goods and services at a national level.