GST Council approves draft Compensation Bill

Finance minister Arun JaitleyThe GST Council entrusted with the task of bringing about the new goods and services tax regime in the country, today approved the law for compensating states for loss of revenue that they may incur during implementation of new indirect tax regime.

The GST Council, which has representatives of states and the centre as members, met in Udaipur to vet the draft supporting legislations crucial for the implementation of the GST.

A decision on rate slabs will be taken after the next meeting of the GST council to be held on 4-5 March, finance minister Arun Jaitley said after the council meeting.

The meeting was intended to give the final go-ahead to supporting legislation needed for the implementation of the of the GST. While one such legislation was cleared, another three will be taken up at the next meeting of the council.

On the Central GST Bill, the State GST Bill and the Integrated GST Bill, Jaitley said the council discussed some issues that had come up during the legal vetting process and gave its views. These views will now be incorporated and the council will likely approve these changes at the March 4-5 meeting, he added.

''After 4-5 March, officers will start fitting items into slabs. One major meeting after 4-5 March is needed to approve these slabs,'' said Jaitley.

The Council has finalised a four-rate structure under which goods and services will be taxed. The rates have been set at 5, 12, 18 and 28 per cent, with an additional cess over and above the highest tax rate for demerit goods.

The government hopes to introduce the Model GST Law in Parliament in the second half of the Budget Session beginning from 9 March.

At its last meeting, the GST Council had cleared the contentious issue of administration of tax assessees. It was decided that assessees with an annual turnover below Rs1.5 crore will be divided between the states and the centre in the ratio of 90:10.

Those with an annual turnover above Rs1.5 crore will be divided equally between the states and the centre.