GST Council approves law to compensate states:

The Goods and Services Tax (GST) Council, at its 10th meeting, ratified the draft law for compensation to states. However, it could not ratify the three enabling laws —

Integrated GST (IGST), State GST (SGST) and Central GST (CGST) draft laws because of some contentious issues that cropped up.These three enabling laws are now expected to be ratified by the GST Council in its next meeting, March.

Finance Minister Arun Jaitley said. If they are ratified, they would be taken up in Parliament during the second half of the Budget session starting March 9.It was also decided at the meeting, held in Udaipur, that a fourth law, for Union Territories, would also be drafted on the lines the SGST draft law, and would be cleared by Parliament, said senior government sources. “The legally vetted draft of the compensation Bill came before the Council and was approved. It will not come before the Council anymore, and will be taken to the Cabinet for approval.

Know More:

(A) GST-Goods and Services Tax (GST) is a proposed system of indirect taxation in India merging most of the existing taxes into single system of taxation. It was introduced as The Constitution (One Hundred and First Amendment) Act 2016.

GST would be a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India, to replace taxes levied by the central and state governments. The GST is consumption based tax levied on the supply of Goods and Services which means it would be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method.

From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%, free movement of goods from one state to another without stopping at state borders for hours for payment of state tax or entry tax and reduction in paperwork to a large extent.

Effect on India as a whole-“The tax rate under GST may be nominal or zero rated for the time being. It has been proposed to insulate the revenues of the States from the impact of GST, with the expectation that in due course, GST will be levied on petroleum and petroleum products.” The central government has assured states of compensation for any revenue losses incurred by them from the date of introduction of GST for a period of five years.

(B) IGST-“Integrated Goods and Services Tax” (IGST) means tax levied under this Act on the supply of any goods and/or services in the course of inter-State trade or commerce.

Tags:(National “Economy”)

Quiz of the Day