Thiruvananthapuram

29°C

Haze

Enter word or phrase

Look for articles in

Last Updated Saturday November 18 2017 06:14 AM IST

GST rollout likely on July 1: Jaitley

Text Size
Your form is submitted successfully.

Recipient's Mail:*

( For more than one recipient, type addresses seperated by comma )

Your Name:*

Your E-mail ID:*

Your Comment:

Enter the letters from image :

Council approves final draft of Central GST

New Delhi: The GST Council Saturday fixed a 5 percent tax rate on small hotels and restaurants and approved draft of key supporting legislations to enable rollout of the new indirect tax regime from July 1.

The all-powerful Council approved the final draft of Central GST (C-GST) and Integrated GST (I-GST) and will take up for approval the State-GST and Union Territory-GST (UT-GST) laws at its next meeting on March 16.

The C-GST, which will give powers to Center to levy GST on goods and services after union levies like excise and service tax are subsumed, and I-GST that is to be levied on inter-state supplies, will go to Parliament for approval in the second half of the Budget session beginning March 9, finance minister Arun Jaitley said.

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 of the state legislative assemblies. UT-GST will also go to Parliament for approval.

Jaitley said the model GST Law will have a clause to enable levy of up to 40 percent tax (20 percent by the Center and an equal amount by the states) but the effective tax rates will be kept at the previously approved levels of 5, 12, 18 and 28 percent.

"The rates will be what has been decided by the Council. There won't be a higher rate of taxation. But the cap rate in the legislation is always put at a higher level to leave a headspace, just as in the Customs Act you have a difference between the bound rate and applied rate. So the applied rate is going to be what the council has decided," Jaitley said.

This is being done to obviate the need for going to Parliament in case the levy is to be raised on certain goods and services.

This will also help in a scenario where the cess on de-merit goods being proposed to compensate states for loss of revenue from GST, is to be merged with the tax rate itself, he told reporters after the meeting.

"As it looks like, it looks on track. Hopefully, the laws would be before Parliament this session and subject to the Parliament approving them, July 1 this year now optimistically looks like the possible date for GST implementation," he said.

The Council, headed by Jaitley and comprising representatives of all states, decided to levy a 5 percent GST (2.5 percent by Center and 2.5 percent by state) on small hotels, restaurants and dhabas with an annual turnover of up to Rs 50 lakh.

Revenue secretary Hasmukh Adhia said there were demands that restaurants should be included in the composition scheme, particularly those with less turnover. "So the Council decided that there would be a composition scheme for restaurants up to a turnover of Rs 50 lakh and the rate for them is 5 percent. So the remaining restaurants, they will come in the regular service tax rate," Adhia said.

Adhia said the first meeting of GST Council had decided that composition scheme in GST regime would be applicable on trading and manufacturing units with up to Rs 50 lakh turnover.

The composition scheme provides for a easier method of calculating tax liability and allows GST registration for dealers with turnover below the compounding cut-off.

The scheme has been introduced to reduce the administrative cost associated with collection of tax from small traders. Hence, businesses below a turnover of Rs 50 lakh can pay taxes at a defined floor rate of 1 percent, and manufacturers can pay at 2 percent, much lower than the GST rate. For services, it would be 5 percent.

Your form is submitted successfully.

Recipient's Mail:*

( For more than one recipient, type addresses seperated by comma )

Your Name:*

Your E-mail ID:*

Your Comment:

Enter the letters from image :

The opinions expressed here do not reflect those of Malayala Manorama. Legal action under the IT Act will be taken against those making derogatory and obscene statements.

Email ID:

User Name:

User Name:

News Letter News Alert
News Letter News Alert