GST Council finalises five more sets of rules
01 October 2016
The Goods and Services Tax (GST) Council on Friday finalised five more sets of draft rules on registration, payment, refund, returns and invoices, taking the number of issues resolved to six.
With as many as six issues, including the GST trigger, settled by the Council in two meetings in a span of one week, finance minister Arun Jaitley said the government is in line to roll out the GST regime on 1 April 2017 as planned.
He said the task of fixing GST rates, service tax assessments and compensation for the states remained yet unresolved and will be decided in the council's next meeting on 18-20 October.
The Council has representatives of all the states and has resolved six issues in two meetings in the span of a single week.
Despite the proposed GST roll-out in April 2017, Jaitley said the constitution amendment bill empowers the central government to levy excise duty on manufacturing; and service tax on the supply of services. Similarly, state governments can levy sales tax or value added tax (VAT) on the sale of goods till that time, ie, 16 September 2016.
In opening remarks at the fourth meeting of the Parliamentary Consultative Committee attached to the ministry of finance, Jaitley said the government so far has been strictly following the road map for implementation of GST.
Under area-based exemptions, Jaitley said the centre will reimburse only 58 per cent and who will reimburse the remaining 42 per cent will be decided at the next meeting. ''We are trying to build every decision through consensus,'' Jaitley said.
Asked how the supply contracts - where both goods and services components are involved - would be taxed in the GST regime, revenue secretary Hasmukh Adhia said the matter has been referred to the officers committee.
Discussions on service tax assessment and the formula for calculating compensation to be paid to states in case of revenue shortfall as a result of implementation of the GST regime, possibly from 1 April 2017, will be taken up at the next meeting on 18-20 October. The government is targeting 22 November for completing major work on deciding tax rate, exemptions and draft legislation by the Council.
''Now after this, two items remain. The rates would be the big item to discuss and after that we will go on to draft rules of GST law,'' Jaitley said, adding that the ''… discussion was inconclusive and therefore it will continue in the next meeting on 18th (October).''
The non-ratification of even one item on the minutes would mean that the whole minutes of the meeting are not agreed upon.
Some of the members suggested that availability of IT network in all parts of the country, especially in small towns and rural areas, must be ensured as GST system will work only online. Members also appreciated the government's initiative in getting the GST law passed by both the Houses of Parliament as well as its commitment to implement it in a time bound manner.
Members hoped that this law will bring relief to the common man by exempting certain essential items from GST and moderate rate of taxation on other items which in turn will bring down the prices of common man consumption items as well as cost of living at large.