With focus on the goods and services tax (GST) shifted to rules and fitment of rates now, the GST Council on Friday set the ball in motion by clearing rules on five categories and tentatively approving another set of four norms. The next GST Council on May18 and 19 will take up four set of rules to finally clear them and item-wise rates, which will leave just one and a half month for the industry to prepare for these changes.
The five rules which were finally cleared by the GST Council relate to registration, returns, payment, refunds and invoices. The four set of rules approved by the Council are with regards to input tax credit, valuation, transitional provisions and composition, finance minister Arun Jaitley told reporters after the meeting.
While five set of rules were approved by the Council earlier as well, but they were changed here and there for bringing them in sync with the cleared GST Bills by Parliament.
Meanwhile, the four GST Bills will be discussed and passed in the Rajya Sabha when Parliament reconvenes after the short break on Wednesday.
The four rules tentatively approved by the Council would now be put in public domain so that the industry suggests changes in them.
These changes will be taken up by the next meeting slated for May in Srinagar, Jaitley said.
Besides, the meeting will consider the fitment of items in the five slabs- zero%, 5%, 12%, 18% and 28%. Sin and luxury products such as tobacco, cigarettes, coal, luxury cars and aerated drinks will attract a cess over the peak rate of 28 per cent.
The issue now could be that if the fitment of rates is decided by May 19 as well as a set of four rules, the industry will get just one and a half months for preparing themselves for these changes.
If these get delayed further, the businesses will get as much less time.
However, an official in the finance ministry said that fitment of rates will be more or less a mechanical exercise. This means that the items will attract the GST rates which will be more or less equivalent to the present indirect tax incidence on them.
But even then rules on input tax credit and transition are very relevant for the industry which may be cleared only by May 19. Also important are rules on valuation as industry wants to know what happens to their inter-branch transfers.
Kerala finance minister Thomas Issac said," we must not delay the GST roll out."
Delhi deputy chief minister Manish Sisodia also said if possible GST should be rolled out from July one. "We are all ready for July one roll-out."
Parliamentary Affairs Minister Ananth Kumar said once the Bills get the presidential assent and notified, the state legislative assemblies would need to pass the State GST Bill soon, preferably by calling a special session.
The minister said he expected the Bills to find support from all parties, including the Opposition, in the Rajya Sabha.
The Opposition, particularly the Congress, Trinamool Congress and Left parties have indicated that they might move amendments to the CGST and IGST Bills.
These parties argue that the existing Bills have made the GST Council superior to Parliament as the government would go by the Council's recommendations on fixing of tax rates.
The GST Bills are money bills. This means the Lok Sabha can reject the amendments that the Rajya Sabha might adopt.