As India's most ambitious indirect tax reform received the green light from the Lok Sabha earlier this week, the 13th Goods and Services Tax (GST) Council approved the drafts of four sets of rules and finalised five others on Friday, bringing the country closer to one unified tax regime.
The council, headed by Union Finance Minister Arun Jaitley, approved the draft rule relating to composition, valuation, ITC (input tax credit) and the transition process. With today’s meeting the council has approved all nine sets of rules required for implementing GST. "Today we discussed four set of rules, GST input tax credit rules, valuation rules, transitional provisions and composition rules," Jaitley said. Five other rules involving registration, payment, refund, invoices and returns, the drafts of which were already approved in the Council’s previous meeting, were finalised today factoring in amendments to make these compatible with the GST Bills that the Lok Sabha passed.
The tentatively approved rules will be put up for public comments and industry can send their suggestions. The rules will be taken up for final approval at the next meeting to be held in Srinagar on 18-19 May where the rates of individual commodities will also be taken up for consideration.
As the rules are now finalised, the committee of officials will work on the fitment of commodities. The focus will now shift to the “classification” or “fitment” exercise ~ a comprehensive list specifying the tax rate that each good and service will attract.
With the passage of Bills in Parliament, the ball is now in the states' court, which are expected to ensure timely passage of the State GST Bill in their respective Assemblies. "The exercise should ideally be completed over the next two-three months," a finance ministry official said.
The Council is also likely to review the preparedness for the introduction of GST, including that of the administration and migration of assessees to the GST Network.
The government plans to implement GST from 1 July 2017.