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).
- 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.