GST to be rolled out from next April: Understanding the roadmap

Zee Media Bureau

The ruling government is ready to rollout Goods and Services Tax (GST) from April 1, 2017. With this it's clear that uniform tax rate throughout the country will be a reality from the approaching year. However, the readiness with respect to infrastructure development for implementation of GST is still to be evaluated.

In the first meeting of the GST Council that was held today a number of welcome decisions were taken.

In his opening remarks at the Fourth Meeting of the Parliamentary Consultative Committee meeting here, Finance Minister Arun Jaitley said the government so far is following the road map for implementation of GST "as per the schedule".

Jaitley said that till September 16, 2017, one year after the provisions of the Constitution (101st Amendment) Act, 2016 being brought into force, the Constitution empowers the central government to levy excise duty on manufacturing, and service tax on the supply of services.

Similarly, the Constitution Amendment Act empowers the state governments to levy sales tax or Value Added Tax (VAT) on the sale of goods till that time September 16, 2016.

The Finance Minister further said that the first meeting of the GST Council was held in a very cordial and constructive environment earlier this month. The second meeting is scheduled today.

The GST Council is a joint forum of the Centre and the States. The Council will take decisions on important issues like tax rates, exemption list and threshold limits.

Members of Consultative Committee sought various clarifications with regard to GST Law and gave suggestions for its better implementation.

Some of the major suggestions include need for absolute clarity and transparency with regard to where taxes will be collected, assessed and where the appeal will be filed in case of GST regime.

As per a release, the members said that it will be a challenging task to tackle complex situation arising-out of implementation of GST law in a federal system.

Some of them suggested there is a need for launching a large scale awareness campaign especially for small traders as most of them are still unaware of the complex procedures and processes under the GST regime including registration and filing of returns.

Some of the members suggested that availability of IT network in all parts of the country, especially in small towns and rural areas, must be ensured as GST system will work only online.

The members hoped that the law will provide relief to the common man by exempting certain essential items from GST and moderate rate of taxation on other items which in turn will bring down the prices of common man consumption items as well as cost of living at large.

The target roll-out of GST will depend on the passage of the Central GST and the Integrated and GST (IGST) bills in parliament and the respective state GST bills by each state.

The GST Council will decide on the tax rate, and will recommend the taxes to be subsumed and exempted from the GST, the rates of taxation and the model Central, State and Integrated GST laws.

It will also decide the threshold for levy of the tax, as well as the dispute resolution mechanism, among other important issues.

The GST is a single indirect tax that proposes to subsume most central and state taxes like the Value Added Tax, service tax, central sales tax, excise duty, additional customs duty and special additional customs duty.

The states will, however, be able to adopt a GST structure that is different from that recommended by the GST Council and the council recommendations will not be binding on the states.

The bill says the GST Council will make recommendations to the Centre and the states on issues such as taxes, cess and surcharges that might be subsumed in the GST tax rate. 

Parliament and state assemblies have the right to accept those recommendations in their GST Bills.

(With PTI/IANS inputs)