 "Pranab Mukherjee")
The move paves the way for setting up of a GST Council that will make recommendations on a model GST Bill, rates and other important aspects before the new indirect tax regime rolls out.
The Act was put on the official gazette on Thursday.
Meanwhile, Chief Economic Advisor Arvind Subramanian batted for a lower GST rate as this would allay fears about inflation and help improve compliance. Also, the Andhra Pradesh Assembly ratified the Bill, becoming the 18th state to do so.
The President will constitute the GST Council within 60 days. The body, comprising the Union finance minister, union minister of state for finance in charge of revenue, and state finance ministers or any minister nominated by states, will recommend GST Bills, rates, and contentious issues of control of assessing and scrutiny, besides a threshold for attracting GST. A senior finance ministry official had said on Wednesday the government need not go to the Cabinet to set up the GST Council, as the Constitution Amendment Bill already had a provision in this regard.
The Bill was sent to the President’s secretariat after as many as 17 states, Bharatiya Janata Party-ruled Assam being the first, ratified the Bill. Those that have passed the legislation include Bihar, Jharkhand, Chhattisgarh, Himachal Pradesh, Gujarat, Madhya Pradesh, Delhi, Nagaland, Maharashtra, Haryana, Sikkim, Mizoram, Telangana, Goa, Odisha and Rajasthan. The CGST and IGST will be drafted on the basis of the model GST law. The states will draft their respective state GST (SGST) laws with minor variation incorporating state-based exemptions. The IGST law would deal with inter-state movement of goods and services. Finance Minister Arun Jaitley had on Wednesday said April 1, 2017, was a stiff target to roll out the GST.
“On balance, I think we should err on the side of a lower (GST) rate and then, if you discover that you are falling short on revenue, there are other ways of coping with it,” Subramanian told a TV channel. He contended that a lot of juggling and reconciliation of multiple objectives would have to be undertaken to decide the GST rate, but “a lower rate is better than a higher rate”. Last year, a panel headed by Subramanian had suggested 17-18 per cent as the standard rate for the bulk of goods and services while recommending a 12 per cent for low rate goods and 40 per cent for demerit ones like luxury cars, aerated beverages, pan masala and tobacco. For precious metals, it recommended a range of two-six per cent.
BUILDING BLOCK
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The President will constitute GST Council within 60 days
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The body will recommend GST Bills, rates, and contentious issues of control of assessing and scrutiny, besides a threshold for attracting GST
- The govt need not go to the Cabinet to set up the GST Council, as the Constitution Amendment Bill already had a provision in this regard
