As
compared to the time taken in arriving at a consensus on the Constitutional
Amendment Bill for GST, the subsequent events after the passing of the Bill
indicate that the Government of India and the States have done remarkably well
in taking all necessary steps for implementation of GST. The Report Card below
indicates that Government of India lost no time in implementing the GST so far:
As soon as the President’s assent was received on the Constitutional Amendment Act
for GST on 8th September, 2016, the GST Council was created by the
Cabinet within a period of one week along with the Secretariat. Under Article
279A of the Constitution, the GST Council has been entrusted with the power to
make recommendations to the Union and the States on various GST related issues,
including those relating to goods and services that may be subject of, or
exempted from the goods and services tax; the threshold limit of turnover below
which goods and services may be exempted from GST and the rates including floor
rates with bands of GST.
Since notification of the GST Council on 12 September 2016, six meetings of the
Council have been held in New Delhi. These meetings were held on 22-23
September, 2016; 30 September, 2016; 18-19 October, 2016; 3-4 November, 2016;
2-3December, 2016 and 11 December, 2016. During these meetings, number of
important decisions have been taken paving way for roll out of GST with effect
from 1st April 2017.
Some
of the important decisions taken in the last six Meetings of the GST Council
are:
i. The
threshold limit for exemption from levy of GST would be Rs.20 lakhs for normal
States (Rs.10 lakhs for the Special Category States enumerated in Article 279A
of the Constitution).
ii. The
threshold for availing the Composition scheme would be Rs.50 lakhs. Service
providers would be kept out of the Composition scheme.
iii. To
compensate States for 5 years for loss of revenue due to implementation of GST,
the base year for the revenue of the State would be 2015-16 and a fixed growth
rate of 14% will be applied to it.
iv. Approval
of the Draft GST Rules on Registration; Payment; Return; Refund and Invoice,
Debit & Credit Notes with the understanding that minor changes may be
permitted with the approval of the Chairperson, if required, due to suggestions
from the stakeholders or from the Law Department.
v. All
entities exempted from payment of indirect tax under any existing tax incentive
scheme would pay tax in the GST regime and the decision to continue with any incentive
scheme shall be with the concerned State or Central Government. In case any
State Government or Central Government decides to continue any existing
exemption/incentive scheme, it will be administered by way of a reimbursement
mechanism.
vi. Bands
of rates of goods under GST shall be 5%, 12%, 18% and 28% and in addition there
would be a category of exempt goods. Further, a cess would be levied on certain
goods such as luxury cars, aerated drinks, pan masala and tobacco products,
over and above the rate of 28% for payment of compensation to the States.
The
GST Council in its 1st meeting decided that GST would be rolled-out
by 1 April 2017. Accordingly, various timelines had been decided for various
aspects of implementation of GST such as recommendation of the Model GST Laws
by the GST Council and its passage by the Union Parliament and State
Legislatures; the development of front-end Information Technology (IT) modules
on the common GST portal and the back-end IT systems; testing and integration
of GST front-end and back-end IT systems of all stakeholders; training of both
Central and State tax officials; sensitization of the trade, industry and
consumers. All efforts are being made to meet the necessary deadlines to ensure
that GST is rolled out by 1 April 2017.
At
present, agenda items pertaining to ‘GST related draft laws’
and ‘Provisions for cross empowerment to ensure single interface under GST’ are
under consideration of the GST Council. 99 Sections the Model GST Law have
already been considered by the Council and remaining Sections will be discussed
in the next meeting of the Council scheduled for 22-23 December, 2016.
The
discussions in GST Council have been very cordial and all decisions till now
have been taken by consensus. Members of the Council are participating in the
meetings with a very positive attitude and are working towards the roll-out of
GST as per the deadline.
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DSM/KA