Moving on fast track to roll out the new indirect tax regime from July 1 this year, the Goods and Services Tax (GST) Council, chaired by Finance Minister Arun Jaitley, at its 12th meeting approved the State GST and Union Territory GST laws which were the final two draft laws that needed to be passed. In its previous meetings, the council had cleared Central GST (CGST), integrated GST (IGST) and the Compensation legislation.
All the five draft legislations will now be sent to the Cabinet for approval and then to the Parliament, which is currently in session for the final nod. The government is hoping the C-GST, I-GST, UT-GST and the GST Compensation laws will be approved in the current session of Parliament and state legislatures will soon clear the S-GST bills so that the new indirect tax regime can be implemented from July 1.
On similar lines, the panel also agreed to cap the cess on various so-called demerit (or sin and luxury) goods in the legislation. The cess on luxury and sin goods under GST will be capped at 15%. The GST cess will be capped for tobacco and products at Rs 4,170 per 1,000 sticks. Environment cess has been capped at Rs 400 per ton, while luxury cars will attract cess of as much as 15%. On pan masala, the cess has been capped at 135% ad valorem. Also, a maximum cess on mineral water and aerated drinks will be at 15%. The cess would be levied for five years but can be continued longer. The council will meet again on March 31 to approve rules after which fitting goods and services in the four-slab tax structure of 5, 12, 18 and 28 per cent will be taken up.