The cabinet cleared all 4 supporting GST legislations on 20th March 2017. This act has paved a clean way to Parliament. The supporting legislations of GST, the Central-GST (C-GST), the Compensation Law, Union Territory-GST (UT-GST) and Integrated-GST (I-GST) will be put in the Money bill, as per the sources. The Prime Minister, Narendra Modi only aimed at clearing the legislations of GST in the Union Cabinet meeting which was chaired by him.
The sources even claimed that the 4 GST legislations will be put into the parliament discussion. Post approval of Parliament, the states will take their SGST bill for discussion and further passing in the assemblies of their respective state.
The council of GST in its meetings held earlier has already sent their approvals to all 4 of them as the State-GST (S-GST) bill. Although the S-GST will be passed by every state legislative assembly but the other four laws need to get the approval of Parliament.
The passage of legislations will surely make the way for GST from July 1. As per the hopes of the government, the approval of C-GST, UT-GST and the GST Compensation laws will be done in the Parliament’s current session and soon each state legislature will approve S-GST too.
Post rolling out of the new indirect tax regime, a composite GST will be taxed on the sale of goods or on the services provided and the generated revenue will be divided between the states and the Centre in nearly an equal proportion. Therefore, the central taxes like the service and the excise and the state taxes like VAT will come in the GST.
C-GST will provide power to the central government to put GST on the services and the goods after the exercise and service tax of Union are subsumed. I-GST will be levied on inter-state supplies. The states will be allowed to put tax over VAT via S-GST and other state taxes will be subsumed in the GST. Moreover, UT-GST will go to Parliament for approval.
A four-tier tax structure comprising of 5, 12, 18 and 28 per cent has already been finalized by the council but the model GST law will keep the peak rate up to 40 per cent to prevent the need for addressing Parliament for any shift in rates in future.