The biggest tax reform of the country, Goods and Services Tax, is now a step closer to implementation with the Cabinet approving the formation of the GST Council headed by Finance Minister Arun Jaitley. “The GST Council Secretariat shall be manned by officers taken on deputation from both the Central and State Governments”, the Cabinet said in a statement. “We are happy that we are running ahead of the time schedule so far”.
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In another key decision, the Ca binet Committee on Economic Affairs approved a bigger 20 lakh tonne buffer stock for pulses to check periodic price spikes even as the latest data showed a sharp decline in inflation. The council will consist of the Union Finance Minister and State Finance Ministers.
Appointment of the Secretary (Revenue) as the Ex-officio Secretary to the GST Council has also been approved. The finance ministry has already asked states to send the names of ministers they wish to nominate. We are monitoring IT preparedness of states, we are on track.
India’s cabinet approved the creation of a panel to determine details of a new national sales tax, which would transform the $2 trillion economy into one of the world’s largest single markets. First mooted more than a decade ago, GST was to have been in place by 2010 but was held up due to lack of political consensus. “We are all geared up for the April 1, 2017 deadline”, he added.
The approval came on the day when the Constitution Amendment Act on GST came into effect.
The Bill says the GST Council will make recommendations to the Centre and the states on issues such as taxes, cess and surcharges that might be subsumed in the GST tax rate.
On the implementing of GST, Ficci said that in order to provide adequate time to trade and industry to prepare “for a hassle-free rollout of the GST regime”, a minimum of six months should be permitted from the date of the adoption of the GST law by the GST Council. “We will have to see how things proceed”. “So from September 22 to November 22, should be a reasonable time limit for discussing and thrashing out the major issues”.
The GST Council will decide on the tax rate, will recommend the taxes to be subsumed and exempted from GST, the rates of taxation and the model Central, State and Integrated GST laws.
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The government is looking to introduce the central GST (CGST) and integrated GST (IGST) legislation in the winter session of Parliament in November. It also sanctioned the creation of new posts – Additional Secretary to the Council and four posts of Commissioner at the level of Joint Secretary to the Centre – in the Secretariat.
