28 March,2017 08:13 AM IST | | Agencies
The govt proposes to launch GST from July 1; its passage will help integrate India as one market, with one rate of tax, instead of state and central levies
Arun Jaitley introduced a Central Goods and Service Tax or CGST bill which will amalgamate all the indirect central government levies like sales tax, service tax, excise duty etc. Pic/PTI
New Delhi: Finance Minister Arun Jaitley yesterday introduced in the Lok Sabha four bills on Goods and Services Tax, providing for a maximum GST rate of 40 per cent, an anti-profiteering authority, and arrests for evading taxes.
With this, rollout of GST - the biggest tax reform since independence - has entered the last lap and its passage by Parliament will pave the way for integrating India as one market, with one rate of tax replacing multiple state and central levies.
The bills
Jaitley introduced a Central Goods and Service Tax or CGST bill which will amalgamate all the indirect central government levies like sales tax, service tax, excise duty, additional customs duty (Countervailing Duty), special additional duty of customs, surcharges and cesses. CGST provides for a maximum tax of 20 per cent.
Actual rates would however be a four-tier tax structure of 5, 12, 18 and 28 per cent as approved by the GST Council. The peak rate of 40 per cent is only an enabling provision for financial emergencies.
A Union Territory GST Bill will take care of taxation in Chandigarh, Andaman and Nicobar Islands, Lakshadweep, Dadra and Nagar Haveli, and Daman and Diu.
A Bill on Integrated-GST - to be levied and collected by the Centre on inter-state supply of goods and services, was also introduced in the Lok Sabha. The IGST law provides for a maximum tax of 40 per cent.
Jaitley also introduced a fourth legislation called GST (Compensation to States) Bill, 2017 that provides for mechanism for making good any loss of revenue of states from introduction of GST in first five years of rollout. These four bills will be taken up for discussion together.
A State-GST will amalgamate all state taxes like VAT. It will be levied by states and has to be approved by all state legislatures. Together, CGST and SGST will enable the GST incidence of 40 per cent. GST will not apply to Jammu and Kashmir.
Objections dismissed
As Jaitley introduced the bills, Opposition, Congress and TMC, protested saying it was not listed in yesterday's agenda for the House.
Minister of State for Parliamentary Affairs S S Ahluwalia said the bills were uploaded on the government website on the midnight of Friday.
The Opposition MPs, however, took strong objection asking how could the government expect the members to check the website at midnight and why the issue was not discussed at the meeting of Business Advisory Committee last week.
Dismissing the objections, Speaker Sumitra Mahajan said the bills were sent to the MPs on Saturday morning and there was nothing wrong in them being tabled.
