GST council approves law to compensate states for revenue loss
Posted on:21 Feb 2017 09:14:06
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21 February 2017 Current Affairs: The GST Council has approved a law to compensate states for any loss of revenue from the implementation of the new nationwide indirect taxation regime.
The meeting was held in Udaipur, Rajasthan first time outside national capital. It was headed by Union Finance Minister and attended by representatives from all states.
GST is a consumption based indirect tax levied on sale, manufacture and consumption on goods and services at a national level. It will replace a plethora of central and state indirect taxes.
The Compensation Law provides compensation to states that will incur losses because of implementation of the Goods and Service Tax (GST) in the first five years. This law will go to Parliament for approval in the second half of the 2017-18 Budget Session beginning March 9, 2017.
This meeting deferred approval for enabling laws i.e. Central GST (C-GST), Integrated GST (I-GST) and State GST (S- GST) for full fledge implementation of GST regime.
Besides, Council gave its suggestions to legal sub-committee which is drafting the model laws, on issues like delegation of powers, composition of appeal at tribunal to adjudicate on disputes and exemptions during transition phase.
GST Council has been established as per Article 279A of the Constitution. It is joint forum of the Centre and the States to make recommendations on important issues related to GST. Union Finance Minister is Chairperson of the council.
Besides, Union Minister of State (MoS) in-charge of Revenue of finance and Minister In-charge of taxation or finance or any other Minister nominated by each State Government are its Members.
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