GST Council Current Affairs

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GST Council approves States and UTs GST Bills

GST Council meeting presided by Finance Minister Arun Gaitley has approved draft Bills for implementing the goods and services tax (GST) in States and Union Territories (UTs). It was the 12th meeting of the GST Council.

The Council already has approved three other GST Bills pertaining to central GST, integrated GST and the compensation to be paid to States for loss of revenue.

The approval of these bills paves the way for the Centre and the States to pilot GST, the new indirect tax system, proposed to be introduced from July 1, 2017 through Parliament and the state assemblies.

Key Facts
  • The Council also approved the ceiling rates for the cess to be levied on top of the maximum GST rate of 28% on demerit or sin goods. Four tax rates (ceilings) 5%, 12%, 18% and 28% have been proposed under the GST.
  • It also proposed 15% ceiling on the cess to be levied on aerated drinks and luxury cars over and above the maximum proposed GST rate of 28%.
  • It also proposed separate cess ceilings for pan masala and tobacco products, including chewing tobacco and cigarettes. However, Beedis have been kept out of the GST net.
  • It also decided to make the tax treatment of items produced in special economic zones (SEZs) similar to that on exports. Procurement of supplies by SEZs will be zero-rated.

About Goods and Services Tax (GST)

GST is proposed uniform indirect taxation regime throughout the country. It was approved by The Constitution (One Hundred and First Amendment) Act, 2016. It will merge most of the existing indirect taxes into single system of taxation. It is consumption based tax levied on the supply of Goods and Services which will be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method.

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GST Council approves final draft of Central GST, Integrated GST laws

The GST Council meeting headed by Union Finance Minister Arun Jaitley approved the final draft of Central GST (CGST) and Inter-State GST (IGST) laws.

The approval of CGST and IGST laws is considered as significant step towards meeting the July 1, 2017 deadline for rolling out of the Goods and Services Tax (GST).

Key Facts
  • The UT-GST and SGST laws will be approved in the next GST Council meeting. It already has approved compensation bill.
  • Once all the bills are approved by the council, the Union government will collectively take the bills to the Union cabinet for its approval.
  • Subsequently, the CGST, IGST and UTGST laws and Compensation law to compensate states for revenue losses arising from a transition to GST will require the approval of Parliament. SGST law will require the nod of state legislative assemblies.
  • There will be no change in the tax rates approved by the Council. However, there will be a cap of 40% in the legislation.
  • Agriculturists will be exempted from registering under GST regime. Business entities with an annual turnover of up to 20 lakhs rupees will also not be required registration under the new tax regime.
About Goods and Services Tax (GST)
  • GST is proposed uniform indirect taxation regime throughout the country. It will merge most of the existing indirect taxes into single system of taxation.
  • It is consumption based tax levied on the supply of Goods and Services which will be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method.
  • GST will be a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India. It was approved by The Constitution (One Hundred and First Amendment) Act, 2016.
  • It seeks to enhance fiscal federalism by removing indirect tax barriers across states and integrate the country into a common market, boosting government revenue and reducing business costs.

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GST council approves law to compensate states for revenue loss  

The GST Council has approved a law to compensate states for any loss of revenue from the implementation of the new nationwide indirect taxation regime.

The meeting was held in Udaipur, Rajasthan first time outside national capital. It was headed by Union Finance Minister and attended by representatives from all states.

Key Facts
  • GST is a consumption based indirect tax levied on sale, manufacture and consumption on goods and services at a national level. It will replace a plethora of central and state indirect taxes.
  • The Compensation Law provides compensation to states that will incur losses because of implementation of the Goods and Service Tax (GST) in the first five years.
  • This law will go to Parliament for approval in the second half of the 2017-18 Budget Session beginning March 9, 2017.
  • This meeting deferred approval for enabling laws i.e. Central GST (C-GST), Integrated GST (I-GST) and State GST (S- GST) for full fledge implementation of GST regime.
  • Besides, Council gave its suggestions to legal sub-committee which is drafting the model laws, on issues like delegation of powers, composition of appeal at tribunal to adjudicate on disputes and exemptions during transition phase.

About GST Council

GST Council has been established as per Article 279A of the Constitution. It is joint forum of the Centre and the States to make recommendations on important issues related to GST. Union Finance Minister is Chairperson of the council. Besides, Union Minister of State (MoS) in-charge of Revenue of finance and Minister In-charge of taxation or finance or any other Minister nominated by each State Government are its Members.

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