NEW DELHI: The Union Cabinet on Monday approved four legislations required to implement the goods and services tax (GST), allowing for their introduction in parliament this week.
The government hopes to complete the legislative work for this biggest reform of the indirect tax regime in the ongoing budget session so that it can be rolled out from July 1.
“The Union Cabinet chaired by Prime Minister Narendra Modi has approved the four GST related bills — The Central Goods and Services Tax Bill 2017 (The CGST Bill), The Integrated Goods and Services Tax Bill 2017 (The IGST Bill), The Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill) and The Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill),” an official statement said.
The bills were approved last week by the GST Council, a body of centre and states empowered to take decisions in respect of GST.
The bills are likely to be introduced as money bill, ensuring they do not get stalled in the Rajya Sabha where the NDA government does not have the numbers.
numbers. “The government is committed to introduction of GST, one of the biggest reforms, in the country as early as possible. GST Council has decided July 1 as the date of commencement of GST,” the statement said.
The GST Council has approved a four-tier tax slabs of 5, 12, 18 and 28% within an overall cap of 40%. In addition, a cess will be levied on demerit goods like luxury cars, aerated drinks and tobacco products.
The CGST Bill sets the tax regime for the levy of GST on intra-state supply of goods or services or both by the central government. IGST Bill deals levy of GST on inter-state supply of goods or services or both by the central government.
Similarly, the UTGST Bill provides for levy of GST on intra-UT supply of goods and services in the Union Territories without legislature. The Compensation Bill provides for compensation to the states for loss of revenue due to GST for a period of five years.
All state assemblies will have to separately approve the state GST legislation before this one-nationone-tax regime can be rolled out.
“It is expected that the implementation of the Goods and Services Tax law will lead to an increase in Gross Domestic Product (GDP) of the country by 1-2%. This in turn will lead to the creation of more employment and increase in productivity,” the statement said.