India may approve GST legislations soon

Government races to meet the July 1 target date for roll-out of indirect tax regime

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

A set of four supporting legislations — the Compensation Law, the Central-GST or C-GST, Integrated-GST or I-GST and Union TerritoryGST or UT-GST — are likely to together go to the Cabinet for approval.

Sources said the Cabinet meeting has been called for Monday morning and the agenda list may not be very long.

The GST Council, in its previous two meetings, had given approval to the four legislations as also the StateGST (S-GST) bill. While the S-GST 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 C-GST, I-GST, UT-GST and the GST Compensation laws will be approved in the current session of Parliament and the S-GST 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 the 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 proportions.

This is because central taxes like excise and service tax and state levies like VAT will be subsumed in the GST.

Sources said the Council has already finalised a fourtier tax structure of 5, 12, 18 and 28 per cent, but the model GST law has kept the peak rate at 40 per cent (20 per cent to be levied by the Centre and an equal amount by states) to obviate the need to approach Parliament for any change in rates in future.