A joint meeting of state and central finance ministers Saturday finalised the draft legislations for CGST (Central GST) and I-GST (Integrated GST) to implement a common goods and services tax across the country from July 01.
It’s a big break through for finance minister Arun Jaitley who was hard pressed to get the CGST and IGST bill passed in the second part of the ongoing budget session when the Parliament reconvenes next week after a month long recess.
GST which would subsume most of state and federal levies on production and supply of goods and services has missed several deadlines.
After the meeting of all powerful GST council, finance minister Jaitley said: “Approval of draft of state-GST (SGST) which is to be cleared by state assemblies is on the anvil. UT-GST along with SGST will be on lines of CGST law; GST Council to consider them at March 16 meeting.”
In the earlier meetings of the council, coastal states had sought the right to levy tax on sea based trade within India’s maritime boundaries.
There were other issues between the centre and states over the threshold level for the business to be administered by the centre and states that had delayed the approvals of CGST and SGST laws.
“As many as 26 changes sought by the states have been accepted by the Centre. This shows the federalist character of India. CGST and IGST will come up for further discussion at the next meeting of the Council in mid-March,” West Bengal Finance Minister Amit Mitra said.
Mitra further said both the Centre and states have agreed to provide a composition scheme to dhabas and small restaurants.
“States were seeking that dhabas and small restaurants can adopt the composite scheme. The Centre has agreed to that and now these small businesses will pay 5 per cent tax (to be shared equally between the Centre and states),” Mitra said.
Delhi Deputy Chief Minister Manish Sisodia said the central GST and integrated GST legislations have been broadly agreed upon at the Council meeting today.
“Real estate should be brought under GST. Everybody knows that a lot of blackmoney finds its way into real estate and bringing real estate under GST will help in curbing black money,” Sisodia said.
Jammu & Kashmir Finance Minister Haseeb Drabu felt that “some minor editorial changes” are required in the legislations and they have to be sent to the legal department again.
Mitra further said IGST, which relates to taxation of inter-state transfer of goods, the legislation will provide for cross empowerment of state and central officers.
“It has been agreed that there will be cross empowerment of states. Also, we did not want this as a notification, we wanted in the Act so that never in future can another council come and say states won’t have power,” Mitra stressed.
(With input from agencies).