GST Bill gets President Pranab Mukherjee's approval, becomes a law

New Delhi: President Pranab Mukherjee on Thursday gave assent to the  constitution amendment bill on GST, setting the stage for bringing next batch of legislations to roll out the indirect tax from the next financial year. The Parliament had on August 8 passed the Constitution Amendment Bill which was then circulated to state governments seeking its ratification. A Constitution amendment bill needs to be ratified by the legislative Assemblies of at least 50 per cent of the states.

The bill was sent to the President’s secretariat after as many as 17 states ratified the bill. After President’s nod Centre will now set up of a GST council which will decide on the crucial issues of the GST. The GST Council will decide on the tax rate, cess and surcharges which are to be subsumed and also decide on the goods and services which would be exempted from the purview of the new indirect tax regime.

Headed by Union finance minister Arun Jaitley, the council will comprise state finance ministers. The states and the Centre are working overtime and talking to stakeholders to draft the Central GST, State GST and Integrated GST laws, which are to be passed in the Winter Session of Parliament. The CGST and IGST will be drafted on the basis of the model GST law. The states will draft their respective State GST (SGST) laws with minor variation incorporating state-based exemptions. The IGST law would deal with inter-state movement of goods and services.

Meanwhile, CEA Arvind Subramanian on Thursday made a pitch for a lower GST rate, saying it will help improve compliance and dispel inflation fears. “... On balance, I think we should err on side of lower (GST) rate and then, if you discover that you are falling short on revenue, there are other ways of coping with it,” Mr Subramanian told a tv channel.