Arun Jaitley, officials brief Narendra Modi on GST roll-out preparation
Jaitley, along with Finance Secretary Ashok Lavasa and Revenue Secretary Hasmukh Adhia, made a presentation to the Prime Minister on the state of readiness for creation of a national sales tax (or GST).
“In exercise of the powers conferred by article 279A of the Constitution, the President hereby constitutes the Goods and Services Tax Council…”, said a government notification.
However, he welcomed that the formation of the GST Council has been approved by the Cabinet and that a number of State assemblies have also endorsed the Constitution Amendment Bill which is an indication that implementation of GST remains as per schedule.
Targeting to roll out the ambitious GST on April 1 next year, Prime Minister Narendra Modi has directed that all steps required in this direction should be completed before that date. The bill is also expected to boost tax collection by making compliance easy for retailers and other businesses as also reduce overall taxation levels. It also added that states where the goods and services are consumed will benefit more as GST is consumption-based tax and not production-based.
On September 8, Jaitey had said the Centre and the states were “running against time”, and there were issues, which the proposed GST Council would need to address.
While the pan-India overhaul of India’s indirect tax regime has got the mandatory support of more than half the states, Tamil Nadu’s ruling AIADMK had walked out before the voting on the Bill began, both in the Rajya Sabha and the Lok Sabha.
“As per the current indications and reports, goods will be categorised as being subject to merit rates (12 per cent), standard rates (18 per cent) and de-merit rates (40 per cent)”, Ficci said in a release following a meeting here with the Empowered Committee. “Abatement may continue for some consumers facing services where it is impossible to segregate value of services and goods such as restaurants where combined impact of the GST rate is much higher than present tax rate under VAT and service tax”, said M S Mani, senior director at consultancy firm Delloite Deloitte Haskins & Sells LLP.
The directive and the observation came at a meeting Modi chaired here yesterday to review the preparedness for rollout for GST and to ensure that there is no slippage on the date of its implementation from April 1, 2017.
The CGST and IGST will be drafted on the basis of the model GST law.