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State GST Bill gets nod, Jaitley says roll out likely in July

State GST Bill gets nod, Jaitley says roll out likely in July

The GST Council chaired by Union Finance Minister Arun Jaitley on Thursday approved the drafts of the remaining two key laws namely - State GST and Union Territories GST. The next meeting will be held on March 31.

Union finance minister Arun Jaitley talks to West Bengal finance minister Amit Mitra (centre) and Puducherry chief minister V Narayanasami at the GST Council Meeting in New Delhi on Thursday.

For the objective of empowerment, cap of cess on demerit goods on top of peak rate of GST has been kept at 15%, Arun Jaitley said.

While Bidis have been kept out of the GST net, separate cess ceilings have been approved for pan masala and tobacco products, including chewing tobacco and cigarettes - keeping adequate room to raise the effective rate from their existing levels. The GST Council had past year decided on four tax slab rates, 5 per cent, 12 per cent, 18 per cent and 28 per cent, with another "zero tax rate" on several items that approximately constitute half of the consumer price index basket including food grains.

The panel at its last meeting approved the final draft of central GST (C-GST) and integrated GST (I-GST) laws. The cess on colas and cars has been capped at 15%, which means that the total tax incidence on sweetened drinks and cars can not be more than 43% (tax rate of 28%+cess of 15%).

The state GST (SGST) laws will simultaneously go to state cabinets and their legislatures.


A maximum cess on mineral water and aerated drinks will be at 15%; while a cap on cess on "pan masala" will be levied at 135%, the governement official said. The draft is being circulated to state assemblies.

"After these rules are approved, one major action remains - the fitment of various commodities into different tax slabs which we will strive to do in the Council meeting thereafter". GST Council has kept the option open for levy of 15 per cent cess on "all other supplies" "If a luxury auto at present commands a total tax of 40 per cent, under the new indirect tax regime, a GST of 28 per cent plus 12 per cent cess would be levied to keep the tax incidence at the same level".

"Once that is done, we will be ready for GST implementation". Procurement of supplies by SEZs will be zero-rated.

With a targeted implementation date of July 1 for GST, the Centre is keen to take the four Bills - CGST, IGST, UTGST and compensation - to the Cabinet latest by next week and then table them in Parliament.

The council also decided to make the tax treatment of items produced in special economic zones (SEZs) similar to that on exports. The actual cess on these items will be decided later but the cap has been provided in the draft legislation, the sources said.