In order to implement the country’s biggest tax regime from July 2017, the Union Cabinet is likely to take up the approval of four supporting legislations—the Compensation Law, the central GST (CGST), integrated GST (IGST) and Union Territory GST (UTGST) on March 20, which will then be introduced in Parliament.
In the previous two meetings, the GST council had given approval to the four legislations as also the State-GST (S-GST) bill. While the S-GST has to be passed by each of the state legislative assemblies, the other four laws have to be approved by Parliament. Once approved, levy of GST will get legal backing. The government is hoping the C-GST, I-GST, UT-GST and the GST Compensation laws will be approved in the current session of Parliament and state legislatures will soon clear the S-GST bills so that the GST regime can be implemented from July 1.
After the roll out of new indirect tax regime, a composite GST will be levied on sale of goods or rendering of services and the revenue would be split between Centre and states in almost equal proportion. This is because central taxes like excise and service tax and state levies like VAT will be subsumed in the GST. While the CGST will give powers to the Centre to levy GST on goods and services after Union levies like excise and service tax are subsumed, the IGST is to be levied on inter-state supplies. Moreover, the SGST will allow states to levy the tax after VAT and other state levies are subsumed in the GST and the UTGST will also go to Parliament for approval.