GST council to finalise rules for new tax regime today
The Dollar Business Bureau
After the Lok Sabha approved the four supplementary GST legislations - Central GST (CGST), Integrated GST (IGST), Union Territory GST (UTGST) and the Compensation law, the Centre and the State governments will on Friday come up with the final rules and regulations of the new tax framework.
The GST Council has already cleared five sets of norms pertaining to registration, payments, refund, invoice and returns. However, these sets of rules will need some minor tweaking by the council.
The GST Council will discuss four more rules related to composition, valuation, input tax credit and transitions. The similar rules for registration, payment, returns, invoice and refund will be made as one and presented before the Council.
The GST will subsume excise duty, service tax and other local levies. Existing service tax, excise and VAT assessees will migrate to the new tax framework by registering on the GSTN portal. 60% of those assessees have already been migrated to the Goods and Services Tax Network.
The GST Council has come up with a four-tier tax structure - 5, 12, 18 and 28%. The luxury and demerit goods will attract a cess to compensate states for revenue loss in the first five years of GST implementation.
Luxury cars and aerated drinks will attract a cess of 15%, and pan masala will have 135% cap on it. Tobacco cess has been capped at a mixture of Rs.4,170 per 1,000 sticks or ad valorem of 290%. Cess on coal will at Rs.400 per tonne.
Meanwhile, the Central GST (CGST) law has a peak rate at 20% while the State GST (SGST) law has been pegged at a similar rate, which takes the peak rate to 40% coming into force only in financial exigencies.
The government has set up ten working groups to understand and deliberate upon issues faced by trade and industry across various sectors to ensure the GST framework undergoes a smooth transition.