Even though no progress was made in the last GST Council meeting on 2 and 3 December 2016, last month had seen substantial developments on the GST front. Few of these have been summarised below for reference:
(i) Rates decided
In the meeting held on 3 November 2016, a multi-tiered GST rate structure was finalised as under:
- Zero tax rate – This would include approximately 50% goods of the CPI. It was indicated that food grains used by common people would be included in this category
- 5% – These would include goods of mass consumption used by common people i.e. essential commodities
- 12% and 18% – These would be the standard rate of tax for goods
- 28% – There would be a higher rate of 28% on certain items which fall under category of luxury goods, sin products or demerit goods. Further, an additional cess would be levied over and above this demerit rate on certain items.
The rate for services is yet to be decided. The items to be covered in each category would be decided separately by Revenue secretaries who would then provide a report on the same to the GST Council.
(ii) Model GST laws
The updated Model GST laws were released in public domain on 26 November 2016.
(iii) Migration of registrations
The GSTN portal has launched the portal for migration of existing taxpayers to GST on 8 November 2016 at www.gst.gov.in. The details of migration timelines for various State has been provided.
While no consensus was reached, it is encouraging to see that substantial progress seems to have been made in terms of discussion on the Model GST laws and general consensus seems to have been achieved on the chapters discussed during the meeting.
The Government is still aiming to pass the GST laws in the winter session of the Parliament (which is up to 16 December 2016). However, if this is not achieved, it would mean that passage of the GST laws would be deferred to the budget session.
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