GST Council on Thursday managed to take a few major decisions, giving rise to expectation that the government will indeed be able to roll out the crucial indirect tax reform on 1 July itself.
With the Council on Thursday approving the remaining two draft bills — UTGST (Union Territory GST) and SGST (state GST) — all the five enabling draft bills stand approved to enable a likely rollout of the new indirect tax regime by 1 July.
“The 12th Council meeting approved UTGST and SGST today. Officers had already done the groundwork, The drafts were already circulated. In the past meetings, the Council has already approved CGST (Central GST), IGST (Integrated GST) and Compensation drafts,” Finance Minister Arun Jaitley, who chairs the Council, told reporters here.
The council also approved a maximum of 15 percent cess on top of the peak GST rate of 28 percent on luxury goods and aerated drinks.
The actual cess on demerit goods, which will help create a corpus for compensating states for any loss of revenue from GST implementation in the first five years, may be lower than the cap as the Council has kept a “little” headroom for future exigencies, Finance Minister Arun Jaitley said.
Giving an example, he said if a luxury car at present commands a total tax of 40 percent, under the new indirect tax regime, a GST of 28 percent plus 12 per cent cess would be levied to keep the tax incidence at the same level.