Goods and Services Tax rollout: Key decisions taken by the GST Council so far

Since notification of the GST Council on 12 September 2016, six meetings of the Council have been held in New Delhi.

During these meetings, number of important decisions have been taken paving way for roll out of GST with effect from 1st April 2017.

These meetings were held on 22-23 September, 2016; 30 September, 2016; 18-19 October, 2016; 3-4 November, 2016; 2-3December, 2016 and 11 December, 2016.

Some of the important decisions taken in the last six Meetings of the GST Council are:

-The threshold limit for exemption from levy of GST would be Rs 20 lakhs for normal States (Rs 10 lakhs for the Special Category States enumerated in Article 279A of the Constitution).

-The threshold for availing the Composition scheme would be Rs 50 lakhs. Service providers would be kept out of the Composition scheme.

-To compensate States for 5 years for loss of revenue due to implementation of GST, the base year for the revenue of the State would be 2015-16 and a fixed growth rate of 14% will be applied to it.

-Approval of the Draft GST Rules on Registration; Payment; Return; Refund and Invoice, Debit & Credit Notes with the understanding that minor changes may be permitted with the approval of the Chairperson, if required, due to suggestions from the stakeholders or from the Law Department.

-All entities exempted from payment of indirect tax under any existing tax incentive scheme would pay tax in the GST regime and the decision to continue with any incentive scheme shall be with the concerned State or Central Government. In case any State Government or Central Government decides to continue any existing exemption/incentive scheme, it will be administered by way of a reimbursement mechanism.

-Bands of rates of goods under GST shall be 5%, 12%, 18% and 28% and in addition there would be a category of exempt goods. Further, a cess would be levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the rate of 28% for payment of compensation to the States.