The Goods and Services Tax (GST) Council, headed by Finance Minister Arun Jaitley, tentatively approved four sets of rules for the new indirect tax regime in its 13th meeting on Friday, inching nearer towards meeting the July 1 rollout target.
Of the total nine sets of GST Rules, five were approved by the Council earlier and four were tentatively approved in today’s meeting. Public comments have already been sought on the five approved ones, and the same will be done for the four cleared today, said jaitley.
Speaking to reporters after the Council meeting, Revenue Secretary Hasmukh Adhia said that he did not anticipate major changes to the four sets of rules approved today as otherwise they would require fresh approval by the GST Council.
The final amended draft rules will be taken up at the next meeting on May 18-19 for final approval. More importantly, Jaitley said GST rates for individual items will be discussed at that next meeting.
Revenue Secretary Hasmukh Adhia had told BloombergQuint on Thursday that “95 percent of rate fixation will be mechanical. Only in 5 percent cases, there may be reasons for putting it in a different slab compared to the one it is closest to.” The rate fixation process is unlikely to be a major impediment to the implementation process, he had added.
Here’s a brief look at the four rules cleared by the GST Council today:
Rules relating to input tax credit will give more clarity on availing credit. Input tax credit is the benefit received for the tax which has already been paid on the input used for a particular product.
Transitional provisions relate to credits for existing tax paid, such as excise, service tax and VAT, on inventory goods.
Valuation rules will specify the valuation of the product to be used to levy tax on.
Rules on composition will specify whether other small businesses can avail the Composition Scheme which has a tax rate of 2.5 percent for businesses with a turnover of up to Rs 50 lakh.
The GST Council had approved five sets of rules regarding refunds, registration, invoices, payments and processes in its previous meetings.
Jammu and Kashmir has to draw up its own set of rules to implement GST and will start the process from May, after the final set of guidelines were approved by the Council, said the state’s Finance Minister Haseeb Drabu. J&K’s special status under the Constitution mandates that the state assembly approve all the four GST Bills passed by the Lok Sabhathis week.