GST Council Clears Framework For New Tax Regime
Jun 01, 2017 Legal Guidance
The much awaited Goods and Services Tax (GST) is being put into its final shapes by the GST Council, which recently cleared the framework rules that will define the tax regime. This was days after the Lok Sabha approved crucial laws related to it.
The rules have been approved by the Council after amendments in line with changes in the GST Laws. There are five such laws relating to registration, refund, returns, invoice-debit and credit note payments. Also, drafts of four out of nine remaining rules have been approved. These drafts are for rules related to input tax credit, valuation, transition and composition schemes, as was clarified by the Finance Ministry. These drafts will be made public so that the industry can give their inputs and will be finalised in the next meeting of the Council.
This action has increased the possibility of GST being implemented from July 1. But there is pressure from industry lobbies to postpone the implementation to September 1, so that the industry gets some time prepare for it.
The next meeting of the Council has been scheduled for May 18-19 in Srinagar, where the task of fitting in individual goods into the decided tax slabs will be carried out. This is the last of major tasks remaining in the process. The four tier tax structure finalised by the council is of rates 5 percent, 12 percent, 18 percent, 28 percent and the highest 40 percent.
Laws related to Central GST, integrated-GST, union territory GST and compensation have been approved by the Lok Sabha on March 29. These are now to be presented in the Rajya Sabha. It is observed that the Rajya Sabha would not pose a problem in approving them as these are money bills.
With the next meeting scheduled more than a month away, the industry experts speculate that it would be hard to meet the deadline of July 1 for the Council and the lobby advocating a September 1 deadline would gain more voice.
The recent announcements of GST rules and drafts being finalised give only a three months’ time to businesses to prepare for the new regulations. Keeping in mind that the rates applicable to goods and services will be known only in May, the industry demands a more process based systematic approach to its implementation.
The rules have been approved by the Council after amendments in line with changes in the GST Laws. There are five such laws relating to registration, refund, returns, invoice-debit and credit note payments. Also, drafts of four out of nine remaining rules have been approved. These drafts are for rules related to input tax credit, valuation, transition and composition schemes, as was clarified by the Finance Ministry. These drafts will be made public so that the industry can give their inputs and will be finalised in the next meeting of the Council.
This action has increased the possibility of GST being implemented from July 1. But there is pressure from industry lobbies to postpone the implementation to September 1, so that the industry gets some time prepare for it.
The next meeting of the Council has been scheduled for May 18-19 in Srinagar, where the task of fitting in individual goods into the decided tax slabs will be carried out. This is the last of major tasks remaining in the process. The four tier tax structure finalised by the council is of rates 5 percent, 12 percent, 18 percent, 28 percent and the highest 40 percent.
Laws related to Central GST, integrated-GST, union territory GST and compensation have been approved by the Lok Sabha on March 29. These are now to be presented in the Rajya Sabha. It is observed that the Rajya Sabha would not pose a problem in approving them as these are money bills.
With the next meeting scheduled more than a month away, the industry experts speculate that it would be hard to meet the deadline of July 1 for the Council and the lobby advocating a September 1 deadline would gain more voice.
The recent announcements of GST rules and drafts being finalised give only a three months’ time to businesses to prepare for the new regulations. Keeping in mind that the rates applicable to goods and services will be known only in May, the industry demands a more process based systematic approach to its implementation.
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