Udaipur: Making some headway, the GST Council on Saturday approved a law to compensate states for any loss of revenue from implementation of the new national sales tax but deferred approval for enabling laws to next meeting.
Legal language of a half-a-dozen provisions of the Central GST (C-GST), Integrated GST (I-GST) and State GST (S- GST) laws held up approval but finance minister Arun Jaitley expressed hope to get them approved in the next meeting on March 4-5 so as to take them to Parliament in the Budget session next month.
The Council will get down to fixing rates of taxes for different goods and services by fitting them into the four approved slabs of 5, 12, 18 and 28 per cent, he said. Mr Jaitley said the GST Compensation Law that provides for compensating states that incur losses because of implementation of the Goods and Service Tax (GST) in first five years was approved by the Council on Saturday.
“It will not come before the Council anymore and will be taken to the Cabinet for approval and will make efforts to pass it in the second leg of Budget session (beginning March 9),” he said. The minister also hoped to get the C-GST and I- GST laws approved in the session. S-GST law, after the Council’s approval, will need to be passed by each state legislature.
“During the legal drafting of the C-GST and S-GST and I- GST laws, certain contentious issues came to the fore and it was necessary to place them before the Council to take specific directions,” he said.
The Council gave its suggestions to the legal sub-committee, comprising officers of the Centre and states who are drafting the model laws, on issues like composition of appeal at tribunal to adjudicate on disputes, delegation of powers and exemptions during transition phase.
Other issues included taxation of services and VAT in work contracts, composition limit and definition of agriculture. “After incorporating these clarifications, on March 4-5 meeting in Delhi, these laws will be cleared,” Mr Jaitley said.
GST, which will replace a several central and state taxes, is a consumption based tax levied on sale, manufacture and consumption on goods and services at national level.