With Odisha on Thursday becoming the 16th state to ratify the Goods and Services Tax (GST) Bill, the constitution amendment is now ready to be sent for the President’s assent before being notified as law.
Thus, the pan India overhaul of India’s indirect tax regime has got the mandatory support of more than half the states much earlier than the Centre’s targeted deadline of rolling out the GST by the start of the next fiscal on April 1, 2017.
After Goa became the 15th state to ratify the GST bill on Wednesday, decks would have already been cleared for presidential assent had the West Bengal government moved for its ratification earlier this week.
It did not do so at a one-day special session on Monday, citing “time constraints”.
Meanwhile, at a meeting here with the Empowered Committee of State Finance Ministers on GST on Monday, India Inc. pitched for an 18 per cent standard rate.
They said this rate would generate adequate tax buoyancy without fuelling inflation.
The opposition Congress party had earlier demanded an 18 per cent cap on the GST rate.
Industry chambers also told state finance ministers that the new tax be implemented after a minimum of six months from the date of adoption of the GST law by the GST Council.
The Federation of Indian Chambers of Commerce and Industry (FICCI) suggested that to check inflation and the tendency to evade taxes “the merit rate should be lower and the standard rate should be reasonable”.
“As per current indications and reports, goods will be categorised as being subject to merit rates (12 per cent), standard rates (18 per cent) and de-merit rates (40 per cent),” FICCI said in a release following a meeting here with the Empowered Committee.
“Certain goods will be exempted from GST while bullion and jewellery would be charged to one-two per cent,” it said regarding classification of goods for applying GST rates.
On implementing GST, FICCI said that in order to provide adequate time to trade and industry to prepare “for a hassle-free roll out of the GST regime”, a minimum of six months’ time should be permitted from the date of the adoption of the GST Law by the GST Council.
“Additional time would be required in case the GST Law, as passed by parliament or state legislatures, is significantly different from the one adopted by the GST Council,” the statement added.
In a meeting here with Revenue Secretary Hasmukh Adhia last month, industry chambers had raised concern on the draft GST law, flagging issues like dual administrative control and wide discretionary powers for tax authorities.