Cabinet likely to consider GST supplementary legislation today

The Cabinet may, Monday take up for approval the supporting GST legislation, which will then be introduced in Parliament as the government sprints to meet the July 1 target date for the rollout of the new indirect tax regime.

A set of four supporting pieces of legislation — the compensation law, the central GST or CGST, integrated GST or IGST and Union Territory GST or UTGST — are likely to together go to the Cabinet for approval. Sources said a Cabinet meeting has been called on Monday morning and the agenda might not be too long.

The GST Council, in its previous two meetings, had given approval to the four peices of legislation, as also the state GST (SGST) Bill. While the SGST has to be passed by each of the state legislative assemblies, the other four laws have to be approved by Parliament.

Once approved, levy of goods and services tax (GST) will get legal backing.

The government is hoping the CGST, IGST, UTGST and the GST Compensation laws will be approved in the current session of Parliament and the SGST by each of the state legislatures soon to help roll out the new indirect tax regime from July 1.

While a composite GST will be levied on sale of goods or rendering of services after the new indirect tax regime is rolled out, the revenue would be split between the Centre and states in almost equal proportion. This is because central taxes like excise and service tax and state levies like VAT will be subsumed in the GST.

While the CGST will give powers to the Centre to levy GST on goods and services after Union levies like excise and service tax are subsumed, the IGST is to be levied on inter-state supplies.

The SGST will allow states to levy the tax after VAT and other state levies are subsumed in the GST.