The Goods and Services Tax Council on Thursday approved the State GST and Union Territory GST laws, Finance Minister Arun Jaitley told ANI.
Next meeting of the GST council is on March 31st where rules will be fine tuned before the final discussion on how goods and services will fit in the four tier tax slab structure of 5,12,18 and 28 per cent.
Addressing the conference after the 12th GST Council meeting, Jaitley said: "Today the GST Council gave its approval to the State GST and the Union Territories GST laws and cleared the revised drafts of three other crucial bills". "We will try and do that expeditiously", finance minister Arun Jaitley said after Thursday's meeting of the council, which has representatives from all states. The cap of cess on demerit goods on top of peak rate of GST has been kept at 15% for the goal of empowerment. "In view of this, I want to set up a dedicated cell in the help with the CII so that we can address queries of small traders when GST is implemented in the country", he said.
To be sure, these cess rates are an enabling provision and the actual tax incidence could be lower, depending on the decision of the GST council.
The panel at its last meeting approved the final draft of central GST (C-GST) and integrated GST (I-GST) laws.
Environment cess has been capped at Rs 400 per ton; while luxury cars will attract cess of as much as 15%.
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The draft bills now need to be approved by the Cabinet and tabled in Parliament's ongoing budget session.
The council has taken a tough stand on the pan masala consumption, and has capped the cess at 135 per cent ad valorem. State GST will needed to be approved by each state cabinet and then passed by the respective state assemblies. Officers had already done the groundwork, The drafts were already circulated.
The GST council also agreed to cap the cess on various so-called demerit (or sin and luxury) goods in the legislation.
With regard to taxation of SEZ under the GST regime, an official said it would be "zero rated at par with exports".
"We will have a sufficient buffer in terms of time between the entire preparatory exercise and July 1 date fixed for implementation", Jaitley said, adding the progress so far is in the "right direction". "This is a resounding reiteration from the government about their seriousness to introduce GST by July 1", said Sachin Menon, national head of indirect tax at consultancy firm KPMG.
PwC India Indirect Tax Leader Pratik Jain said, "It is also good to see a capping on cess at 15 per cent along with clear statement that cess will apply only on select commodities".