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In order to implement GST, Constitutional (122nd Amendment) Bill (CAB for short) was introduced in the Parliament and passed by Rajya Sabha on 03rd August, 2016 and Lok Sabha on 08th August, 2016. The CAB was passed by more than 15 states and thereafter Hon’ble President gave assent to “The Constitution (One Hundred And First Amendment) Act, 2016” on 8th of September, 2016. Since then the GST council and been notified bringing into existence the Constitutional body to decide issues relating to GST.

On September 16, 2016, Government of India issued notifications bringing into effect all the sections of CAB setting firmly into motion the rolling out of GST. This notification sets out an outer limit of time of one year, that is till 15-9-2017 for bringing into effect GST.

GST COUNCIL

As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A. The notification for bringing into force Article 279A with effect from 12th September, 2016 was issued on 10th September, 2016.

As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Centre and the States, shall consist of the following members: –

• Union Finance Minister – Chairperson
• b) The Union Minister of State, in-charge of Revenue of finance – Member
• c) The Minister In-charge of finance or taxation or any other Minister nominated by each State Government – Members

As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.

The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi approved setting up of GST Council on 12th September, 2016 and also setting up its Secretariat as per the following details:

• (a) Creation of the GST Council as per Article 279A of the amended Constitution;
• b) Creation of the GST Council Secretariat, with its office at New Delhi;
• (c) Appointment of the Secretary (Revenue) as the Ex-officio Secretary to the GST Council;
• (d) Inclusion of the Chairperson, Central Board of Excise and Customs (CBEC), as a permanent invitee (non-voting) to all proceedings of the GST Council;
• (e) Create one post of Additional Secretary to the GST Council in the GST Council Secretariat (at the level of Additional Secretary to the Government of India), and four posts of Commissioner in the GST Council Secretariat (at the level of Joint Secretary to the Government of India). The Cabinet also decided to provide for adequate funds for meeting the recurring and non-recurring expenses of the GST Council Secretariat, the entire cost for which shall be borne by the Central Government. The GST Council Secretariat shall be manned by officers taken on deputation from both the Central and State Governments.

GST Council Meetings

GST Council has met seventeen times since its constitution and some important decisions taken in the GST Council meeting are:-

• Rules for conduct of business in GST Council.
• Timetable for implementation of GST.
• The threshold limit for exemption from levy of GST would be Rs. 20 lakhs for the States except for the Special Category States, as enumerated in Article 279A of the Constitution, for which it will be Rs 10 Lakhs).
• The threshold for availing the Composition scheme would be Rs. 75 lakhs in States other than the North East States, Sikkim and Himachal Pradesh where the threshold for availing the Composition scheme would be Rs. 50 lakhs.The GST Council has also recommended that manufacturers of the following goods shall not be eligible for the Composition Levy; Ice cream and other edible ice, whether or not containing cocoa, Pan masala, Tobacco and manufactured tobacco substitutes. Service providers would be kept out of the Composition Scheme, except restaurant services.
• 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, valuation, input tax credit, composition and transitional provisions.
• 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, the State or Central Government decides to continue with any existing exemption/incentive scheme; it will be administered by way of a reimbursement mechanism.
• Adoption of four slabs tax rate structure of 5%, 12%, 18% and 28%. In addition, there would be a category of exempt goods and 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.
• GST rates on 1211 items were approved at the 14th GST Council meeting held at Srinagar on 18th and 19th of May 2017.
• At the 15th GST Council meeting held at New Delhi on 3rd June 2017, tax rates on the remaining goods were approved.
• 28 states, and 2 Union Territories with Legislatures (Delhi and Puducherry) have already passed their respective State GST Bill in their State Assemblies.
• Issue of cross empowerment and administrative division of taxpayers between the States and Centre has been resolved.

The Central Goods and Services Tax bill, Integrated Goods and Services Tax bill, Union Territories (without legislature) Goods and Services Tax bill and Goods and Services Tax (Compensation to States) bill have been passed by the Lok Sabha on 29.03.2017 and by the Rajya Sabha on 06.04.2017.

GST Council Meetings 

GST Council has met sixteen times since its constitution and some important decisions taken in the GST Council meetings are:-

• Rules for conduct of business in GST Council;
• Timetable for implementation of GST;

• The threshold limit for exemption from levy of GST would be Rs. 20 lakhs for the States except for the Special Category States, as enumerated in Article 279A of the Constitution, for which it will be Rs 10 Lakhs);
• The threshold for availing the Composition scheme would be Rs. 75 lakhs. (Enhanced from Rs 50 lakhs to Rs 75 lakhs at the 16^th GST Council Meeting held in New Delhi on 11^th June 2017). Service providers and some others 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, based on suitable 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, the State or Central Government decides to continue with any existing exemption/incentive scheme; it will be administered by way of a reimbursement mechanism.
• Adoption of four slabs tax rate structure of 5%, 12%, 18% and 28%. In addition, there would be a category of exempt goods and 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.
• GST rates on majority of items were approved at the 14^th GST Council meeting held at Srinagar on 18^th and 19^th of May 2017.
• At the 15^th GST Council meeting held at New Delhi on 3^rd June 2017, tax rates on the remaining goods were approved.
• 24 states, and 2 Union Territories with Legislatures (Delhi and Puducherry) have already passed their respective State GST Bill in their State Assemblies.
• Issue of cross empowerment and administrative division of taxpayers between the States and Centre has been resolved.
• Rates on 66 items reduced at the 16^th GST Council Meeting held in New Delhi on 11^th June 2017.

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