Cabinet to consider GST laws today

Ivan Schwartz
March 21, 2017

India's cabinet has approved four bills to implement a planned Goods and Services Tax (GST) bills, a government official said on Monday, paving the way for Prime Minister Narendra Modi to implement the landmark tax reform from July.

The legislations approved are Compensation Law, the Central-GST (C-GST), Integrated-GST (I-GST) and Union Territory-GST (UT-GST).

The four supporting legislations - the Compensation Law, the Central-GST (C-GST), Integrated-GST (I-GST) and Union Territory-GST (UT-GST) - would be introduced as Money Bill, sources said.

The Compensation Bill provides for compensation to states for loss of revenue due to implementation of the Goods and Services Tax for five years as per Section 18 of the Constitution (101st Amendment) Act 2016.

Central GST would replace central excise duty, service tax, additional duties of excise and customs, special additional duty of customs, and cesses and surcharges on supply of goods and services. Similarly, the Union Territory GST, which will also go to Parliament for approval, will have a number of other taxes, particularly VAT, central sales tax, etc, subsumed under it. According to PTI, these would be introduced as Money Bill. "GST should be implemented from July 1", Economic Affairs Secretary Shaktikanta Das told BTVi in an interview.

The most ambitious indirect tax reform, the Goods and Services Tax (GST) will soon be a reality.

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It is expected that the implementation of the GST laws will drive the gross domestic product (GDP) of the country up by 1-2 per cent. "This in turn will lead to the creation of more employment and increase in productivity", it said.

The above four Bills were earlier approved by the GST Council after thorough, clause by clause, discussion over 12 meetings of the Council held in the past six months.

The IGST Bill has provisions for the levy and collection of tax on inter-state supply of goods or services or both by the Central government. The Union Territory GST is akin to States Goods and Services Tax (SGST), which will be levied and collected by the states/Union territories on intra-state supply of goods or services, or both.

Commenting on the development, Abhishek Rastogi, Partner, Khaitan & Co, said: "The GST plan is well on time and July 1 looks realistic!"

After the Cabinet gave the green signal to 4 supporting GST legislations, the next stage would see its introduction in the Parliament for approval.

Other reports by GizPress

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