The Union Cabinet today cleared four bills related to the Goods and Services Tax (GST), a crucial step in the run up to the implementation of the overhauled tax regime from July 1.
The Central GST Bill, 2017 (The CGST Bill), Integrated GST Bill, 2017 (The IGST Bill), Union Territory GST Bill, 2017 (The UTGST Bill) and the GST (Compensation to the States) Bill 2017 (The Compensation Bill) were approved by the GST Council, headed by the Finance Minister Arun Jaitley in meetings of the team held in the last six months.
These four bills will now be taken to Parliament for final approval, which would officially conclude the legislative exercise towards implementing GST.
The fifth law—State GST Bill (SGST)—will be taken by the state government through the cabinets to their respective state assemblies.
Under GST, the states and the Centre will collect identical rates of taxes on goods and services. For instance, if 18 percent is the GST rate on a good, the states and the Centre will get 9 percent each called the CGST and SGST rates.
The Centre will also levy and collect (IGST) on all inter-state supply of goods and services. The IGST mechanism has been designed to ensure seamless flow of input tax credit from one state to another.
“Union Territory GST is akin to States GST (SGST) which shall be levied and collected by the States/Union Territories on intra-state supply of goods or services or both,” a government release said.
The Compensation Bill seeks to offer compensation to the states for a period of five years owing to the revenue loss arising on account of implementation as well as switching to a new tax regime--GST.
GST, billed as independent India’s biggest reform initiative, promises to stitch together a common national market by consolidating a web of local and central taxes into a single levy.The current session of the Parliament will conclude on April 12.