The Goods and Services (GST) Council on Saturday cleared the final version of the Compensation Law which seeks to stipulate the manner in which states will be recompensed in the event of a loss due to the implementation of GST, Finance Minister Arun Jaitley said following the Council’s meeting in Udaipur.


The other draft laws—the Central GST law, State GST law, and the Interstate GST law—will come up for legal vetting during the next meeting of the Council on March 4-5, Mr Jaitley added. He said that the issue of anti-profiteering did not come up for discussion during the meeting.


“The GST compensation law, that if a state has a loss, then for the first five years they will be compensated, the legally vetted draft has been formally approved by the GST Council,” Mr Jaitley said during a press conference. “It will go before the Cabinet, which will give its approval and we will seek to place it before Parliament in the second half of the Budget session starting on March 9.”


The Finance Minister said that the vetting of the legal language of the CGST, SGST, and IGST laws raised a few issues that needed to be clarified to the legal committee of the GST Council.


Some of the issues included the eligibility of membership to the appeal tribunals in the Centre and states, the delegation of powers, the exemptions that can be given during the transition phase, the treatment of work contracts where service tax and VAT is applied, and issues related to the definition of agriculture.


“These issues came up during the time of legal vetting of the draft laws, and the legal committee has received its clarifications from the Council,” Mr Jaitley said. “The legal committee will incorporate these changes and on March 4-5, the GST Council will meet again in Delhi and approve these laws.”


 “It now looks highly probable that the GST laws would be formally approved by the council in the next meeting on March 4-5 and Central laws would be put up before the Parliament in the second half of the Budget session, starting on March 9,” Pratik Jain, Partner & Leader, Indirect Tax at PwC India said. “There is nothing which seems to be unresolved now, at least in terms of the legislation.”


Following the next meeting of the Council, Mr Jaitley said that the rates committee will begin deciding which commodities will fall in each rate slab. This, he said, would require one more major meeting of the Council to give its approval to the specific items in each of the slabs.


“It is now necessary to bring more focus on the outcome of the rate fixation exercise as business can prepare only if the rates are known,” MS Mani, Senior Director, Deloitte Haskins & Sells said. “Without knowledge of the rates that are going to be applied on specific goods and services it is very difficult for industry to move forward with GST preparations.”


Andhra Pradesh Finance Minister Yanamala Ramakrishnudu, in a release following the meeting on Saturday, said that he had raised the issue of the treatment of territorial waters, saying that taking them as the territory of Union of India and to delegate the powers to states to collect tax by the central Government is not the correct way to draft the law, especially since the High Court has already decided in favour of states and the matter is pending in the Supreme Court.


“The correct thing is to treat the territorial waters as the territory of state and to allocate powers to states not just to collect but also to levy, collect and appropriate to the states,” Mr Ramakrishnudu said. “The chairman agreed to refer to law committee to examine it.”


Thanks to :The Hindu:


e-max.it: your social media marketing partner