18 March 2017 Current Affairs: GST Council meeting presided by Finance Minister Arun Gaitley has approved draft Bills for implementing the goods and services tax (GST) in States and Union Territories (UTs).
It was the 12th meeting of the GST Council. The Council already has approved three other GST Bills pertaining to central GST, integrated GST and the compensation to be paid to States for loss of revenue.
The approval of these bills paves the way for the Centre and the States to pilot GST, the new indirect tax system, proposed to be introduced from July 1, 2017 through Parliament and the state assemblies.
The Council also approved the ceiling rates for the cess to be levied on top of the maximum GST rate of 28% on demerit or sin goods. Four tax rates (ceilings) 5%, 12%, 18% and 28% have been proposed under the GST. It also proposed 15% ceiling on the cess to be levied on aerated drinks and luxury cars over and above the maximum proposed GST rate of 28%.
It also proposed separate cess ceilings for pan masala and tobacco products, including chewing tobacco and cigarettes. However, Beedis have been kept out of the GST net. It also decided to make the tax treatment of items produced in special economic zones (SEZs) similar to that on exports. Procurement of supplies by SEZs will be zero-rated.
GST is proposed uniform indirect taxation regime throughout the country. It was approved by The Constitution (One Hundred and First Amendment) Act, 2016. It will merge most of the existing indirect taxes into single system of taxation. It is consumption based tax levied on the supply of Goods and Services which will be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method.
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