On Monday morning, the union Cabinet cleared the process, formation and functioning of the Goods and Services Tax Council, which will decide on the rate of tax under the new indirect taxation regime. The Council will have to be set up by November 11.
The decision was taken at the cabinet meeting which was headed by Prime Minister Narendra Modi.
The government has notified September 12, as the date from which the procedure for setting up of the GST Council will begin. The process is expected to be completed within 60 days.
The Cabinet also decided on the constitution of the GST Secretariat and the officers who will implement the decisions of the Council.
It will be headed by Finance Minister Arun Jaitley and have representative of all 29 states and two union territories of India. All state finance ministers as its members. The Council will decide on the tax rate, exemptions and threshold limits in the new indirect tax regime, which is expected to kick in from April 1, 2017.
While the Centre will have one-third vote, states together will have a two-third say. To adopt a resolution, three-fourth majority will be required.
Cabinet’s approval came on the day when the Constitution Amendment Act on GST came into effect. President Pranab Mukherjee had given his assent to the bill last week, paving the way for setting up of a GST Council.
GST is a single indirect tax, which will subsume most of the central and state levies such as Value Added Tax (VAT), Excise Duty, Service Tax, Central Sales Tax, additional Customs Duty and special additional duty of customs.
On August 8, the Parliament had passed the GST Constitution Amendment Bill, which then went to the states for ratification. A Constitution Amendment Bill needs to be ratified by the legislative Assemblies of at least 50 per cent of the 29 states and 2 union territories.
The bill was sent to the President after 19 states ratified the bill.
The states and the Centre are working and talking to stakeholders to draft the Central GST, State GST and Integrated GST laws, which are slated to be passed in Winter Session of Parliament.
(With inputs from PTI)