GST Council clears all 5 laws; cess on luxury goods capped at 15%

New Delhi: The GST Council on Thursday cleared the supplementary legislations needed for a likely implementation of the goods and service tax (GST) regime by July 1.

The Council, headed by Finance Minister Arun Jaitley today approved the state GST and Union Territory GST (UT-GST) laws. The panel at its last meeting had approved the final draft of central GST (C-GST) and integrated GST (I-GST) laws.

For the purpose of empowerment, cap of cess on demerit goods on top of peak rate of GST has been kept at 15%, Arun Jaitley said. He further said the Council will have its 13th meeting on March 31.

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

The S-GST, which will allow states to levy the tax after VAT and other state levies are subsumed in the GST, will have to be passed by each state Assembly. The UT-GST will also go to Parliament for approval.

After getting approval from GST Council, the supporting legislations together with a GST Compensation Law, will go to the Cabinet for a formal nod before they are presented in Parliament in the ongoing Budget session that ends on April 12.

The GST Compensation Law provides for compensating states that incur losses because of implementation of the Goods and Service Tax (GST) in first five years. The compensation will be funded by imposing cess on demerit and luxury goods.

The government is hoping the C-GST, the I-GST, the 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.

GST, which will replace a plethora of central and state taxes, is a consumption-based tax levied on sale, manufacture and consumption on goods and services at a national level. Under it, C-GST will be levied by the Centre, S-GST by states and I-GST on inter-state supply of goods and services.

Various indirect taxes of central excise duty, central sales tax and service tax are to be merged with C-GST, while S-GST will subsume state sales tax, VAT, luxury tax and entertainment tax.

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Source:Zee news

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