STORY: India moved a step closer on Thursday (March 16) towards rolling out a Goods and Services Tax (GST), country’s biggest tax reform, after a council of central and state finance ministry officials approved the State and Union Territory laws.
Finance minister Arun Jaitley said the GST council has agreed on a draft law that will enable states and union territories to impose the Goods and Services Tax (GST).
“The Council now has granted its formal approval to all the five legislations i.e. the CGST (Central GST), IGST (Integrated GST), SGST (State GST), compensation and the UTGST (Union Territory GST) law. So all these laws now stand approved,” Jaitley said, while speaking to reporters after the 12th meeting of the panel in New Delhi.
The GST Council had already approved the Central GST, IGST and compensation laws in its earlier meetings.
Jaitley added that five laws relating to registrations, payment, refunds, invoices and returns had also been approved earlier. Four others bills, which now require a formal approval, relate to composition, valuation, ITC (input tax credit) and the transitions.
“The final draft of the four balance regulations and the corrections, if any, to the earlier regulations, to consider that and approve that we will be meeting in Delhi again for the 13th meeting of the GST Council on the 31st of March at 5pm,” said Jaitley.
Jaitley, who heads the Council, said on March 04 that the much-awaited national sales tax reform, GST, was on track and he was “optimistic” that it would meet its implementation deadline of July 01.
The long-awaited GST was earlier proposed to come into effect from April 1. Its timeline, however, was disrupted by the deadlock on how to collect the new tax that would have federal and state elements.
Under the agreed arrangement, state and federal tax officials would audit and administer businesses with annual turnover of up to 15 million rupees ($220,000), with 90 percent of them coming under the purview of local states and the remainder under federal authorities.
The long-awaited GST would turn Asia’s third-largest economy into a single market for the first time, broaden the tax base and make life simpler for businesses that now pay a host of federal and state levies.
Both the federal and the state governments now levy and collect taxes on goods. However, taxes on services come under the exclusive jurisdiction of the federal government.