After 12 meetings over the last six months, the Goods and Services Tax (GST) Council, which is represented by Union ministers and officials and state finance ministries, on Thursday finally gave its nod to all the five draft legislations needed for implementation of the unified indirect tax.

This paves the way for the model laws – central GST (CGST), state GST (SGST), integrated GST (IGST), Union Territory GST (UTGST) and Compensation Act – to be presented in the ongoing Budget session of Parliament after it is approved by the Union Cabinet.

Union Finance Minister Arun Jaitley said with the approval of these model laws, four of them – CGST, IGST, UTGST and Compensation Act – would be “expeditiously taken to the Lok Sabha” and expected the states to do the same with SGST.

“Four of these laws – CGST, IGST, UTGST and Compensation Laws – will be required to be passed by Parliament, so in the first instance these laws under the Constitution amendment approved by the GST Council will now be taken to the Cabinet and after the Cabinet’s formal approval they’ll be taken to the Lok Sabha. We will try and do that expeditiously. The SGST law will be taken by the respective state governments through its Cabinets to the respective state Assemblies. I am sure, states will be doing it expeditiously,” the minister told the media after the meeting.

Jaitley said the next of the Council will be held on March 31, when four of the draft rules and regulations for the GST would be taken up for discussion.

Of the nine sets of GST rules, five relating to registration, payment, refunds, invoices and returns have already been approved. The Council will look at rules for composition, valuation, input tax credit (ITC) and transitions at the thirteenth meeting.

He said after finalising the draft regulations for the GST, the Council would then work on the fitting various goods and services under different tax slabs.

“We intent to, immediately after March 31, once the rules are approved, take up the exercise of fitment of slabs at the next meeting itself. So, we will have sufficient buffer in terms of time between the entire preparatory exercise and the July 1 which is tentatively date fixed for implementation,” said Jaitley.

The Council has also decided to cap the cess, which is part of the Compensation Act, at 15%. In its earlier meeting, it had said cess will be loaded on 4-5 sin and luxury goods like tobacco, cigarettes, high-end cars, aerated drinks and pan masala for funding the compensation, which would be paid to states. The Central government has agreed to make good losses of states due to GST in the first five years of its implementation.

Pratik Jain, indirect tax leader, PwC India, lauded the capping of the cess on select goods but said; “industry still awaits clarity as to whether some of the existing cesses such as Swach Bharat cess will continue to operate”.

He said finalisation of rules and rate fitment for GST would take another couple of months and therefore its rollout date should be pushed back to September 1 from July 1.

M S Mani, senior director, Deloitte India, said that if the government is not able to publish details of all the laws and its rules and regulations in public domain before the end of April, then the July 1 deadline seemed daunting for the industry.

“What the industry would be requesting the government to do is to, as quickly as possible, please put out the final Act and rules in public domain so that people can be aware and can start preparing to migrate to GST, without the final act and rules people cannot prepare,” said the Deloitte tax expert.

Mani also called for the implantation date to be shifted to September 1.

“If they (government) publish (the Acts and rules) by middle of April, that gives business just two and a half months to prepare, which is too short a time to prepare for a large legislation like GST. I would say the GST goal post should be moved from July 1 to September 1,” he said.

According to Mani, many countries have given one to one and a half years to industry to get ready for the indirect tax reform. #casansaar (PTI - DNA India)