After prez assent, GST Bill now a law

The long-awaited Goods and Services Tax (GST) Bill became a law on Thursday with President Pranab Mukherjee giving his assent. The new law seeks to do away with the slew of indirect taxes and usher in one tax for the entire country.

After the president’s approval, the focus now shifts to the constitution of a GST Council that will set up tax rates. Simultaneously, the Centre will begin drafting the supporting legislations — Central GST and Integrated GST laws, and the federal bodies will give shape to the state GST laws.

The government is planning to get the CGST and IGST laws passed by Parliament in the Winter Session in November. Alongside, all the 29 states will have to agree on a standard GST rate, an exemption list or a list of goods and services that will be out of GST and the tax slabs. But the final tax rate will be decided by the GST Council, which is headed by the Union finance minister, and has state finance ministers as members.

The Constitution (122nd Amendment) Bill, 2014, which was passed by Parliament last month, has been ratified by 18 states so far. Meanwhile, Chief Economic Adviser Arvind Subramanian raised the pitch for a lower GST rate, saying it will help improve compliance and dispel inflation fears. “On balance, I think we should err on the 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,” Subramanian said here.

Last year, a panel headed by Subramanian had suggested 17-18% as the standard rate for the bulk of goods and services,  while recommending 12% for low rate goods and 40% for luxury goods. The government is also organising a townhall meet on GST on September 17 to clear doubts and create awareness about the new law.Concerns of traders, industries and common man will also be addressed through social media platforms.