Economy

Centre releases revised draft of CGST, IGST, compensation law

Our Bureau New Delhi | Updated on January 15, 2018 Published on November 26, 2016

gst

To be tabled in GST Council meeting on Dec 2&3

Moving one step ahead towards the roll-out of the country’s most ambitious indirect tax reform, the Centre had on Saturday released the draft model laws for the central and integrated goods and services tax (GST) as well as the model law for compensation.

“These laws will be considered by the GST Council in its meeting scheduled for December 2 and 3 and will be finalised,” said Revenue Secretary Hasmukh Adhia.

Hoping to meet the deadline of April 1, 2017 for the roll-out of GST, the government is likely to table the three draft laws in Parliament in the second week of December.

Significantly, giving confidence to businesses over stability and predictability of rates, the model CGST law has proposed to include the rate of CGST and State GST and has capped it at 15 per cent.

“Such rates as may be notified by the Central/State Government on this behalf, but not exceeding 14 per cent, on the recommendation of the Council and collected in such manner as may be prescribed,” it said.

Similarly, the IGST has been capped at 28 per cent in the related draft law.

Including the rates in the legislation was also a key demand of the Congress Party.

With 27 chapters and nearly 200 sections, the draft model CGST law has also called for anti-profiteering measures to ensure that consumers get the benefit of lower tax rates under GST.

It has accordingly suggested setting up of an authority to examine whether input tax credits availed or the reduction in price due to lower rate have actually resulted in a commensurate reduction in the prices of goods or services supplied. It has also called for the authority to penalise any defaults.

Government services, including those for health and education as well as posts, have been exempted from payment of CGST.

The IGST draft law has also called for zero rating of exports of goods and services as well as for supplies to special economic zones.

Meanwhile, the draft compensation law has kept a modest revenue growth projection of 14 per cent and has a base year of 2015-16.

It has also called for levy of a GST compensation cess, which will be credited to the GST Compensation Fund.

The Government had released the earlier version of the draft model GST law in June this year.



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Published on November 26, 2016
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